South Carolina Personal Lines Practice Exam

If three volcanic eruptions occur within a specified time frame, how many deductibles apply under the dwelling policy?

1. 1 deductible

2. 3 deductibles

3. No deductibles

4. 2 deductibles

The correct answer is: 1 deductible

In a dwelling policy, when multiple events occur that are related to a single cause, only one deductible typically applies. This principle is designed to provide clarity and consistency in how deductibles are applied in claims scenarios. In the case of three volcanic eruptions happening within a specific time frame, those eruptions are considered a single event from an insurance perspective. Insurers generally view instances stemming from the same cause as a single occurrence for deductible purposes. Therefore, even if there are three separate eruptions, they would all fall under the same deductible amount, leading to the total being one deductible applied to the claim. This approach helps streamline the claims process for the insured and ensures that they are not penalized multiple times for a single incident. It reflects the insurance principle of reducing the burden on policyholders in the face of natural disasters, thereby promoting fairness in the claims process.