Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What does smoke coverage specifically cover?

1. All damage caused by smoke

2. Losses due to sudden, unusual and faulty operation of stationary furnace

3. Smoke-related damages from wildfires

4. Smoke damage from cooking appliances

The correct answer is: Losses due to sudden, unusual and faulty operation of stationary furnace

Smoke coverage specifically addresses losses due to the sudden, unusual, and faulty operation of a stationary furnace. This type of coverage is intended to protect against incidents where smoke results from unexpected failures or malfunctions of heating equipment, which can lead to property damage. The specific nature of the coverage reflects an attempt to mitigate risks associated with residential heating systems, focusing on operational issues rather than general smoke damage, which may not always be covered under standard policies. While other options mention different scenarios involving smoke, they either do not align with the typical definitions of smoke coverage or are better categorized under different types of insurance policies. For instance, damage from cooking appliances or incidental smoke from wildfires may fall under homeowners' policies or fire insurance but are not specifically covered by smoke insurance intended for heating systems.