West Virginia Property and Casualty Licensing Practice Exam

Which of the following is considered an 'extended coverage' peril?

1. Volcanic eruption

2. Ice and snow weight

3. Glass breakage

4. Flooding

The correct answer is: Volcanic eruption

An 'extended coverage' peril refers to specific risks that go beyond the standard coverage provided in typical property insurance policies. These perils are added to the coverage list in order to protect against certain significant but less common events. Volcanic eruption is classified as an extended coverage peril because it is a catastrophic event that can cause significant damage to properties, yet it is not generally included in the basic coverage of most homeowners or property insurance policies. This peril is recognized for its potential to cause extensive damage, which is why it is essential for insurers to offer it as an optional or additional coverage to policyholders who wish to mitigate risk related to such natural disasters. Other perils mentioned, such as flooding, are often excluded from standard policies entirely, typically requiring separate flood insurance policies. Ice and snow weight and glass breakage may be covered under specific standard policies, but they don't fit into the category of extended coverage perils, as they are more common occurrences that insurers generally address through standard coverage. This distinction highlights the unique nature of volcanic eruptions as a significant risk worth noting when considering extended coverage options.