The term broad form coverage can differ in its meaning depending upon what area of insurance you are dealing with. With most insurance policies (general liability, commercial, homeowners, etc.) a policy is usually Basic or Broad Form. Normally in the insurance industry when you hear broad form you think a policy where a broad form policy adds more than the basic policy can cover. For example, for business insurance commonly there is:
- A basic form policy that typically covers fire, explosions, storms, smoke, riots, vandalism, and sprinkler leaks.
- A broad form policy typically adds more coverage for damage from broken windows and other structural glass, falling objects and water damage to the list of covered items.
- Even a special form coverage which offers the widest range of protection, as it typically covers all risks (including theft), unless specifically excluded from the policy.
Typically in most states, including Colorado, insurers refer to a broad form policy to describe a Comprehensive General Liability Insurance policy which, through the policy language or through one or more endorsements to the policy, provides a wide range of coverage that can be tailored to suit the specific needs of the insured. And then a broad form insurance policy is noted as providing protection to the policyholder with a General Liability insurance policy against all Liability exposure except that which is specifically excluded from coverage under the policy.
Some auto insurers have to offer Broad Form insurance options to businesses. This type of car insurance provides coverage for employees, executives, or any other person who is supplied a company vehicle, but who does not own a personal vehicle, and thus does not have coverage under a personal auto policy. An endorsement may be added to the automobile policy of the company that furnishes the automobile to give protection while the named individual or spouse is driving a car borrowed from a third party.
Then in Michigan they have 3 types of Collision coverage - limited, standard and broad form. The protection provided by the 3 types of Collision coverage differs based on determination of fault in an accident:
- Standard— Repair or replacement of an insured car is covered regardless of fault. You'll be responsible for paying your deductible if you ever file a claim.
- Broad - You'll only have to pay your deductible if you're found to be more than 50% at fault in a covered accident. If you're less than 50% at fault, you won't have to pay your deductible.
- Limited - Repair or replacement of an insured car is covered only if the driver is less than 50% at fault. If this is the case, you'll have to pay your deductible. However, if the insured car's driver is more than 50% at fault, damages resulting from the incident are not covered.
So what a Broad Form insurance policy covers depending upon which type of broad form you are referring to. Broad Form that is thought of usually by insurers as a part of Liability policies and offers the policyholder more coverages than the Standard or Basic insurance policy. Insurance agents write broad form policies when the policyholder wants more coverages than what just a basic policy allows.
To find out more about the type of Broad Form insurance policy you are inquiring about try contacting your state's insurance regulator. For Colorado this would be the Division of Insurance. This state agency should be able to tell you about Broad Form insurance policies that are permitted to be sold in CO, what they cover and why agents would sell such policies.
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