South Carolina Personal Lines Practice Exam

Which type of peril coverage is least comprehensive?

1. Open peril

2. Broad peril

3. Basic peril

4. Specific peril

The correct answer is: Basic peril

Basic peril coverage is the least comprehensive type of coverage because it typically only includes a limited list of specific perils that are explicitly named in the policy. This type of coverage usually protects against common risks such as fire, lightning, windstorm, hail, explosion, and theft, among others. However, it excludes many potential hazards and risks, which means policyholders are more vulnerable to losses from incidents that aren't covered. In contrast, open peril coverage offers the most comprehensive protection, as it covers all risks except those specifically excluded. Broad peril coverage, while more extensive than basic, still has limitations by covering specified perils, generally providing more coverage than basic but less than open peril. Specific peril coverage, on the other hand, is designed to cover only specific types of loss that are listed, similar to basic peril but often focusing on a narrower scope. Thus, the basic peril coverage stands out as the least comprehensive due to its restrictive nature and the limited range of protections it offers policyholders.