Arizona Adjuster Practice Exam

What will the insurer's response be regarding Teddy's homeowners policy after the attack by his concealed dogs?

1. It will pay the claim in full

2. It will deny coverage based on concealment or fraud

3. It will only cover medical expenses

4. It will advise Teddy to increase his coverage

The correct answer is: It will deny coverage based on concealment or fraud

The insurer's response regarding Teddy's homeowners policy after the attack by his concealed dogs is most likely to deny coverage based on concealment or fraud. Homeowners insurance policies typically require policyholders to disclose information about the pets they own. If Teddy concealed the fact that he had dogs, particularly if those dogs were known to be aggressive, this could be seen as a violation of the terms of the policy. Insurance companies rely on accurate and complete information to assess risk and determine coverage. When a policyholder fails to disclose important details, such as having concealed pets that attack someone, the insurer may view this as a form of concealment or misrepresentation, which can lead to a denial of the claim. This denial is rooted in the principle that the insurer cannot be expected to provide coverage for risks that were not disclosed or were misrepresented. Hence, the response aligns with the insurer's duty to maintain fair underwriting practices and avoid undue risk.