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S is purchasing a Commercial Property policy to cover a commercial building with a replacement cost of $100,000. The policy includes an 80 percent Coinsurance clause. To avoid a coinsurance penalty in the event of a partial loss, S should purchase a policy with minimum limits of AT LEAST which of the following amounts? A. $100, B. $90, C. $80, D. $20,000 โโC The MAXIMUM amount a policy will pay in the event of a loss is called the: A. coinsurance amount
Pearson VUE: Property Insurance Practice Exam with actual
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B. deductible C. limit of liability D. pro rata return โโC The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences EXCEPT: A. mudslides B. runoff from heavy rain C. overflow of tidal waters D. water-main breakage โโD Special Form or Open Perils coverage:
During a tornado, a barn is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the: A. fire B. collapse of the wall C. tornado D. smoke โโC A fire in an insured's restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fire causes extensive damage to floors and furnishings. The water damage is best described as: A. a time element loss B. a consequential loss
C. a direct loss D. an indirect loss โโC Which of the following terms is defined as the uncertainty of future outcome? A. Risk B. Hazard C. Peril D. Cause โโA The Personal Liability section of a Homeowners policy covers which of the following options? A. Damage to an insured's property caused by a visitor
Which of the following sources may be used to provide property insurability information? A. Police records B. Physical inspections C. Checking account statements D. Lie detector tests โโB All of the following perils are covered under a Building and Business Personal Property Coverage Form with a Causes of Loss-Basic Form attached EXCEPT: A. smoke B. sprinkler leakage C. sinkhole collapse
D. earth movement โโD X insures a home for $100,000 under a Dwelling Property Broad Form (DP-2). If a flood causes $1,000 in damage to the home's contents, which of the following MAXIMUM amounts will X's insurer pay? A. $ B. $ C. $ D. $1,000 โโA In order to issue a written binder for a commercial property policy, what is the MINIMUM consideration a producer must secure from an applicant? A. A promise to pay the premium
Pro-rata cancellation occurs when: A. a policy is nonrenewed B. a mortgage has been satisfied C. an insured cancels a policy at inception D. an insurer cancels a policy at any time โโD Inland Marine insurance is commonly used to insure all of the following items EXCEPT: A. automobiles B. stamps C. camera equipment
D. jewelry โโA A primary obligation of an insurer is to: A. pay the claims covered under the policy B. provide a financial statement with each policy C. make inspections and surveys of insured property D. prepare an inventory after a loss โโA An applicant's statement included in the insurance contract that the property to be insured has an operable sprinkler system is: A. agency binding authority B. a warranty
A. No act by the insured will jeopardize the mortgagee's rights. B. The mortgagee may file a Proof of Loss if the insured fails to do so. C. The mortgagee is entitled to receive prior notice of a policy's cancellation. D. The mortgagee may abandon the insured property to the insurer. โโD A Commercial Property policy specifies which of the following responsibilities as a duty of the insured? A. To return the policy if it is canceled by the insurer B. To provide a sworn Proof of Loss statement if requested by the company C. To pay the mortgagee in full in the event of a total loss D. To pay premiums within thirty days after receiving an invoice โโB
An insured's HO- 2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts? A. $1, B. $1, C. $1, D. $1,500 โโB Under a Homeowners policy, an insured is required to take all of the following actions when a covered loss occurs EXCEPT: A. give prompt notice to the insurer or its producer B. hire an appraiser to determine the amount of loss
A. a person's interest in property she is buying on contract B. a tenant's interest in improvements she has made to a leased building C. a TV repairman's interest in a customer's TV which has been repaired but is still on premises D. an individual's interest in property her parents will someday leave to her โโD A family takes their 50 horsepower outboard motor boat to the lake on a trailer towed behind their personal auto. The pleasure boat is appropriately covered for physical damage under which of the following policies? A. Dwelling B. Homeowners C. Boatowners D. Yacht โโC
Which of the following policy forms would BEST protect a business that must keep operating after a loss? A. Extra Expense B. Business Income C. Gross Earnings D. Contingent Business Interruption โโA Which of the following perils is covered by Broad Form perils but is not covered by the Basic Form? A. Vandalism B. Weight of ice and snow
A. three weeks B. thirty days C. sixty days D. six months โโA Which of the following statements is CORRECT about the Fair Credit Reporting Act? A. It requires an insurer to send to an applicant a copy of the applicant's credit report. B. It requires an insurer to obtain a credit report on an applicant. C. It allows an insurer to obtain a credit report without the applicant's permission. D. It provides a method for an applicant to correct any incorrect information in the credit report. โโD
The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy? A. Declarations B. Insuring Agreement C. Conditions D. Exclusions โโC Under a Personal Property Floater, a loss is covered when it occurs: A. in the insured's home only B. in the United States only
