Alabama Insurance Adjuster Practice Exam

Under a DP-2 Broad Form policy, which scenario would be covered under the peril of Theft?

1. Broken windows

2. Stolen personal belongings

3. Winds damaged by a storm

4. Fire damage to the structure

The correct answer is: Stolen personal belongings

The scenario that would be covered under the peril of Theft in a DP-2 Broad Form policy is when personal belongings are stolen. The DP-2 policy, also known as the Broad Form policy, extends coverage beyond basic loss to include a variety of perils, including theft of personal property. This form is particularly designed to protect against various risks that may cause loss or damage to the insured’s belongings, and theft is explicitly included in the list of covered perils. In contrast, broken windows would generally fall under the coverage for other perils, while winds damaging a structure and fire damage relate to different categories of risk covered by the policy, such as windstorm and fire. The DP-2 Broad Form policy explicitly provides coverage for theft, but the other scenarios presented do not align with the definition of theft as a peril under this insurance form. Thus, the coverage for stolen personal belongings aligns directly with the provisions of the DP-2 policy related to theft.