Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

Why is the Building Damage by Theft extension valuable to a tenant?

1. It covers loss of personal belongings

2. It protects the building owner

3. Tenants are liable for building damage

4. It provides income protection

The correct answer is: Tenants are liable for building damage

The Building Damage by Theft extension is valuable to a tenant primarily because it recognizes the tenant's liability for damage caused to the building as a result of theft. If a tenant is responsible for any damage inflicted on the building, whether intentional or accidental, during a theft incident, this extension can help cover the costs associated with repair or restoration. This can be particularly important in situations where the lease agreement states that the tenant is responsible for maintaining the property and may need to compensate the landlord for damages incurred. While other options may provide some context, they do not directly address how this specific extension benefits the tenant regarding potential liabilities tied to property damage. Coverage for personal belongings, protection of the building owner, and income protection pertain to different aspects of insurance, but the core benefit here directly links to the tenant's responsibilities within their lease agreement.