Florida Insurance Claims Adjuster License Practice Exam

Which Homeowners policy condition provides for the benefit of broadened coverage without an increase in premium?

1. Subrogation

2. Liberalization

3. Assignment

4. Coinsurance

The correct answer is: Liberalization

Broadened coverage refers to an expansion or enhancement of the coverage provided by an insurance policy. The liberalization condition allows for the automatic inclusion of new or revised forms of coverage into an existing policy, without the policyholder having to pay any additional premium. This provides a benefit to the policyholder as they are able to receive additional coverage without incurring any extra costs. Options A, C, and D do not pertain to broadening coverage without an increase in premium. Subrogation refers to the transfer of insurance rights from the insured to the insurer after the insurer has paid out a claim. Assignment refers to the transfer of insurance rights from the insured to a third party. Coinsurance is a clause that requires the policyholder to pay a specified percentage of the covered claim while the insurer pays the remaining portion. None of these options directly relate to broadening coverage without an increase in premium like the