Questions: 1. Exclusions from coverage will NOT a. Eliminate or reduce overlapping coverage b. Encourage loss prevention c. Increase the premium d. Remove unnecessary coverage 2. Which one of the following losses would most likely be excluded by one of the maintenance or wear-and-tear exclusions in a property insurance policy? a. A hailstorm creates cracks in the siding. b. Bees build a nest under the siding. c. Heat from a fire in the building next door melts the siding. d. Pieces of siding blow off in a windstorm.

The answer is c: Increase the premium.

• a. Eliminate or reduce overlapping coverage: Exclusions are often used to prevent overlapping coverage, ensuring that the policyholder is not covered for the same risk under multiple policies. This is a correct statement about exclusions.
• b. Encourage loss prevention: Exclusions can encourage policyholders to take preventive measures to avoid certain risks, as they know those risks are not covered. This is a correct statement about exclusions.
• c. Increase the premium: Exclusions typically do not increase the premium; in fact, they can help keep premiums lower by excluding certain risks from coverage. This is the incorrect statement.
• d. Remove unnecessary coverage: Exclusions help remove coverage for risks that are not needed or desired by the policyholder, which is a correct statement about exclusions.

The answer is b: Bees build a nest under the siding.

• a. A hailstorm creates cracks in the siding: This is typically covered as it is a sudden and accidental event.
• b. Bees build a nest under the siding: This is likely to be excluded as it is considered a maintenance issue or wear-and-tear, which are common exclusions in property insurance policies.
• c. Heat from a fire in the building next door melts the siding: This is usually covered as it is a result of a fire, which is a covered peril.
• d. Pieces of siding blow off in a windstorm: This is typically covered as it is a result of a windstorm, which is a covered peril.