Georgia Adjuster Practice Test

A prospective buyer is excluded from coverage under which type of policy?

1. Property Insurance

2. Businessowners Policy

3. Builders Risk Policy

4. Automobile Policy

The correct answer is: Builders Risk Policy

The Builders Risk Policy is specifically designed to provide coverage for buildings under construction, renovation, or repair. This type of policy typically excludes coverage for prospective buyers because the insurance is intended to protect the property owner or builder during the construction process, rather than any buyer who may come into the picture once the building is completed. The coverage under this policy typically ends when the property is sold or occupied, emphasizing that it is tailored to the interests of the builder or contractor. In the context of the other policy types mentioned, property insurance and businessowners policies can apply to a broader range of interests, including coverage for prospective buyers in specific situations. An automobile policy is designed to provide coverage for vehicles, which would not directly relate to real estate or the construction process. Thus, the Builders Risk Policy is the one that specifically excludes prospective buyers from coverage.