Arizona Adjuster Practice Exam

How does the Protective Safeguards endorsement respond when the fire alarm at Don's Diner was turned off and the building was destroyed by a fire?

1. It provides full coverage for the fire loss

2. It allows partial coverage for the fire loss

3. It excludes coverage for the fire loss

4. It requires a higher deductible for the fire loss

The correct answer is: It excludes coverage for the fire loss

The Protective Safeguards endorsement is designed to ensure that certain protective devices—such as fire alarms—remain operational to qualify for coverage under an insurance policy. If the fire alarm at Don's Diner was turned off, this could represent a breach of the terms outlined in the endorsement. When the protective measures specified in this endorsement are not maintained, it can lead to a complete exclusion of coverage for damages caused by events that those measures are intended to prevent, such as fire. In this case, since the fire alarm was turned off and the building was destroyed by fire, the situation likely points to a failure to comply with the requirements of the endorsement. Thus, the correct answer indicates that coverage for the fire loss is excluded because the necessary protective safeguard was not in place at the time of the incident. The other options would imply that some level of coverage is still available, whether full or partial, or that a higher deductible would apply, but none of those conditions are tied to a scenario where a critical protective measure was intentionally disabled.