Canadian Accredited Insurance Broker (CAIB) One Practice Exam

Under which circumstance does the removal clause extend coverage to another location?

1. The insured moved to a new residence 2 days ago

2. The insured moved personal property to protect it from an incoming forest fire

3. The insured keeps some property at her vacation home during the summer

4. The insured keeps furniture in a rented storage locker

The correct answer is: The insured moved personal property to protect it from an incoming forest fire

The removal clause in insurance policies typically extends coverage to personal property when it is moved to protect it from a peril that threatens it at its original location. Option B describes a scenario where the insured moves their personal property in anticipation of an incoming forest fire, a clear and imminent danger. This action constitutes a protective measure, which is precisely the intention of the removal clause — to provide coverage for the property while it is being evacuated to prevent loss or damage. In contrast, the other options do not fit the context of the removal clause. For instance, in the first option, two days have elapsed since the move, which usually does not qualify for extended coverage under the removal clause, as the intent of the clause is to provide temporary coverage during imminent threats rather than just a change of address. The third option involves keeping property at a vacation home, which generally does not indicate an immediate threat where the removal clause would apply, as it does not show an urgent need to protect due to risk. Finally, the fourth option about keeping furniture in a rented storage locker does not represent a scenario where immediate protection is required, and there typically would be specific coverage for property in storage rather than relying on the removal clause. Thus, option B is the only choice that aligns