Rhode Island Insurance Adjuster Exam

When police cause damage to a home during a drug raid, is that damage covered by insurance?

1. Yes, under liability insurance

2. No, due to Governmental Action Exclusion

3. Yes, under public safety expenses

4. No, but it can be covered under property insurance

The correct answer is: No, due to Governmental Action Exclusion

The correct answer is based on the concept of the Governmental Action Exclusion, which is commonly found in property insurance policies. This exclusion typically indicates that damage caused by government actions—such as police activity during a drug raid—is not covered by standard homeowners or property insurance. In the context of the question, when police conduct operations that result in property damage, the actions are considered governmental actions. Most insurance policies explicitly exclude coverage for losses incurred due to such actions to protect insurers from significant liabilities that could arise from the expansive powers of government and law enforcement. This exclusion is put in place because the government generally has the authority to impose such actions for public safety and welfare, and it aligns with policies set to avoid insurance claims being used to indemnify against governmental functions. Considering the other choices, while liability insurance may cover certain damages inflicted unintentionally by individuals or entities, it does not extend to governmental actions. Public safety expenses typically refer to costs associated with maintaining safety rather than covering damage caused by safety enforcement actions. Although property insurance generally covers various forms of damage, the specific exclusion for governmental actions overrides this coverage in scenarios like those occurring during a drug raid. Thus, understanding the Governmental Action Exclusion is crucial for comprehending why damage incurred through police operations