Hawaii Insurance Adjuster License Practice Exam

What must an insurance company be advised of regarding a dwelling under construction?

1. When any construction delays occur.

2. When construction is completed and occupancy is taken within 30 days.

3. When structural changes are planned.

4. When permits have been issued.

The correct answer is: When construction is completed and occupancy is taken within 30 days.

An insurance company must be informed when construction is completed and occupancy is taken within a specific timeframe, typically 30 days, because this information is crucial for updating the policy coverage. As the construction process progresses, the risk associated with the property can change significantly. When the dwelling is near completion and is occupied, the insurance needs also shift to cover not just the structure but any potential liability associated with people living in or using the property. Ensuring that the insurance provider is notified about the completion of construction is vital for maintaining adequate coverage and protecting homeowners from unforeseen liabilities or gaps in their insurance policy. This notification also allows the insurer to assess if the existing coverage is still appropriate based on the new circumstances surrounding the property.