Texas Adjuster Practice Test

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What does All Risk Insurance cover?

Only specific risks mentioned in the policy
Loss or damage from any cause that is not excluded
Only theft-related losses
Only natural disasters

The correct answer is: Loss or damage from any cause that is not excluded

All Risk Insurance, also known as Open Peril Insurance, provides coverage for loss or damage from any cause that is not explicitly excluded in the policy. This type of insurance is designed to offer broad protection, meaning that it will cover a wide range of potential risks. The policies typically enumerate specific exclusions, such as acts of war, intentional damage, or certain types of natural disasters, which are not covered. This makes the coverage comprehensive compared to policies that only cover specific, detailed perils. Therefore, the correct understanding of All Risk Insurance is that it covers a variety of risks, focusing on what's not outlined as excluded rather than limiting coverage to a specific list of potential hazards.