Kaycee obtains fire insurance on an empty warehouse.Later,Kaycee manufactures and stores fireworks in the building.A lightning strike in a thunderstorm explodes the fireworks and destroys the building.The fire insurance policy is:

Question

Quizplus · Accepted Answer

When Kaycee obtained the fire insurance policy, the building was empty which was a lower risk than when the building had fireworks stored in it. Therefore, when Kaycee later stored fireworks in the building, there was a material change in risk. This means that the fire insurance policy became void as the insurance company did not agree to cover the increased risk.

Kaycee Obtains Fire Insurance on an Empty Warehouse