5
QuizMultiple Choice

Insurance — Quiz

Question 5 • Economics

In what circumstance would a property insurance claim be rejected?

Answer
A
The property damage is caused by a natural disaster, such as a flood.
B
The insurance company finds that a homeowner intentionally caused damage.
C
The property damage is extensive and requires lengthy and expensive repairs.
D
The insurance company changes its policies after property damage occurs.

Explanation

A property insurance claim may be rejected if the insurer finds that the homeowner intentionally caused the damage. Insurance generally covers accidental losses, not damage deliberately caused by the policyholder. Extensive repairs alone do not justify rejecting a covered claim, and a policy change made after the damage occurred would not normally erase coverage that applied at the time of the loss.

AI-written and checked against the verified answer.

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