Question

An applicant for property insurance owns a building in which combustive materials are stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a:

A) Low-risk property
B) Standard-risk property
C) High-risk property
D) Moderate-risk property

Answer 1

A building that stores combustive materials in the furnace room would be considered a C) high-risk property for property insurance.

Step-by-step explanation:

From an underwriting standpoint, a building that stores combustive materials in the furnace room would likely be considered a high-risk property for property insurance. Combustive materials pose a significant fire hazard, which increases the likelihood of a loss for the insurer. In such cases, insurance companies may charge higher premiums or impose stricter conditions to mitigate the risk.