Arizona Adjuster Practice Exam

Which peril is NOT typically covered under a basic property policy?

1. Fire

2. Theft

3. Earthquake

4. Windstorm

The correct answer is: Earthquake

In a basic property policy, coverage is typically limited to a specific set of perils that are considered standard. Fire, theft, and windstorm are commonly included because they represent frequent and significant risks for property owners. On the other hand, earthquake coverage is usually excluded from basic property policies. This is primarily because earthquakes can lead to substantial damage that is beyond the scope of what basic policies are designed to cover. Instead, earthquake coverage is often available as an endorsement or separate policy, allowing policyholders to specifically choose to add that coverage if they live in areas where such natural disasters are more likely. This distinction is important for property owners to understand so they can make informed decisions about their coverage needs and possibly seek additional insurance to protect against specific risks like earthquakes.