Kaycee obtains fire insurance on an empty warehouse. Later Kaycee manufactures a
ID: 371677 • Letter: K
Question
Kaycee obtains fire insurance on an empty warehouse. Later Kaycee manufactures and stores fireworks in the building. A lightning strike in a thunderstorm explodes the fireworks and destroys the building. The fire insurance policy is:
valid since the building was empty when the policy was obtained.
void since a material change in risk occurred.
voidable if the lightning was not foreseeable.
valid since there are negligible liabilities which applies to storing fireworks.
valid since the building was empty when the policy was obtained.
void since a material change in risk occurred.
voidable if the lightning was not foreseeable.
valid since there are negligible liabilities which applies to storing fireworks.
Explanation / Answer
The answer to this Question would be Option-2, which is "The Fire Insurance policy is void since a material change in risk occurred"
This is because, any Fire Insurance policy that has to cover the damage due to any kind of explosives or fire crackers has to expressly state in its policy about inclusion of cover for such damage caused due to explosives. In this particular case, assuming that Kaycee, while taking the policy, had not made a mention about using the warehouse for manufacturing fireworks, the policy may not cover such a damage.
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