CPCU 551 PROPERTY: CHAPTER 3
SHORT ANSWER!
Explain why the amount the insurer pays for a loss covered under the Building and
Personal Property Coverage Form, also referred to as the BPP, is generally less than
the applicable amount of insurance: - ANSWERThe amount that the insurer pays for a
loss covered under the Building and Personal Property Coverage Form, also referred to
as BPP, is generally less than the applicable amount of insurance because total
commercial property losses are rare, and the BPP contains limitations in addition to the
limit of insurance that reduce the amount the insurer pays.
Contrast specific and blanket limits of insurance: - ANSWERWhen specific limits are
used, the declarations show separate limits of insurance for each covered building and
for personal property at leach location. A blanket limit can apply one amount insurance
to all property covered by the policy.
Explain how the BPP's deductible is applied following a loss, if the loss exceeds the
deductible shown in the policy declarations: - ANSWERIf a loss exceeds the deductible
shown in the policy declarations, the deductible is subtracted from the loss, not from the
limit of insurance.
Explain how the BPP's deductible is applied when the occurrence involves loss to more
than one item of Covered Property and when separate limits of insurance apply: -
