When studying for your CAIB 2 exam, a lot of students are overwhelmed by the sheer number of Commercial Property coverages, exclusions found in Broad Form and all of the additional coverages (endorsements, crime insurance, etc.). In this post, I will give you 1 simple shortcut that can cut down on the amount of memorization you have to do.
If you recall, there are 3 Commercial Property Coverages: Fire, Named Perils and Broad Form.
Fire coverage is easy to remember, it only covers fire and fire caused by lightning and explosion. Named Perils is also easy to remember using the acronym FSWILLER. Only the perils listed are covered.
The trouble comes when you get to the Broad Form section with that long list of exclusions. How do you memorize all of that?
The trick is: if there is an extension (see Ch 4), it’s likely not covered by Broad Form. For example, the reason we have the Sign Form, is because Broad Form doesn’t cover exterior signs. The reason we have the Account Receivables Form, is because Broad Form doesn’t offer adequate coverage for accounts receivable records.
But I have to warn you, this isn’t an exact approximation. If you can memorize everything, then you should. But if you had to guess, this is a good way to do it.
I hope this helps some of you guys out. There are plenty more tips and tricks where that came from in our CAIB 2 course.