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Pearson Vue Property Insurance Exam
Practice Questions with Verified Answers
100% Guarantee passing score of 90% or higher
Consist of 50 multichoice Questions with Answers
- S is purchasing a Commercial Property policy to cover a commercial build- ing 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. $100,000 B. $90,000 C. $80, D. $20,
2 / Answer: C
- The MAXIMUM amount a policy will pay in the event of a loss is called the: A. coinsurance amount B. deductible C. limit of liability D. pro rata return Answer: C
- The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences EXCEPT: A. mudslides B. runoff from heavy rain
4 / B. Theater C. Branch bank D. Barber shop Answer: D
- 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 Answer: C
- A fire in an insured's restaurant burns the kitchen walls and causes
5 / smoke damage to the entire interior. Water used to extinguish the fire causes exten- sive 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 Answer: C
- Which of the following terms is defined as the uncertainty of future out- come? A. Risk
7 / is covered under a Personal Articles Floater. Damage to the statue would be covered in all of the following situations EXCEPT: A. it was accidentally damaged by a housekeeper B. it was damaged in a flood C. a guest of the insured maliciously damaged it D. the insured threw it Answer: D
- Which of the following sources may be used to provide property insurabil- ity information? A. Police records B. Physical inspections C. Checking account statements D. Lie detector tests
8 / Answer: B
- All of the following perils are covered under a Building and Business Personal Property Coverage Form with a Causes of Loss-Basic Form attached
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D. $1,
Answer: A
- 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 B. A signature on a premium finance agreement C. Payment of six months' premium D. Payment of twelve months' premium Answer: A
- An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which of the following amounts?
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A.
B.
13 / C. camera equipment D. jewelry Answer: A
- 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 Answer: A
- An applicant's statement included in the insurance contract that the prop- erty to be insured has an operable sprinkler system is: A. agency binding authority B. a warranty
14 / C. a representation D. an affidavit Answer: B
- Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured? A. Negligence B. Liability C. Accident D. Occurrence Answer: D
- Which of the following statements about a mortgagee's rights under the Dwelling Property Basic Form (DP-1) is INCORRECT? 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.
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A. $1,
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B. $1,
C. $1,
D. $1,
Answer: B
- 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 C. notify the police if the loss is the result of theft D. protect the property from further loss Answer: B
- A company's promise to pay for damage caused by or resulting from any covered Cause of Loss would be found in which of the following sections of a Commercial Property policy? A. Declarations
19 / covered for physical damage under which of the following policies? A. Dwelling B. Homeowners C. Boatowners D. Yacht Answer: C
- 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 Answer: A
- Which of the following perils is covered by Broad Form perils but is
20 / not covered by the Basic Form? A. Vandalism B. Weight of ice and snow C. Riot D. Windstorm Answer: B
- Which of the following phrases BEST defines a hazard? A. A condition that increases the chance of a loss B. The uncertainty of a loss C. The cause of a loss D. An unexpected loss Answer: A
