PA APPRAISERS CERTIFICATION EXAM
QUESTIONS AND VERIFIED ANSWERS 2026
▶ Insurable Interest. Answer: direct financial interest in protecting
something or someone
▶ Lender Interest. Answer: protects a lender who loans money to a buyer
▶ Risk. Answer: potential for financial loss or an insured item
▶ Exposure. Answer: is openness to loss or damage
▶ hazard. Answer: thing that increases the possibility to loss
▶ moral hazard. Answer: results from policyholder's conscious decision
▶ physical hazard. Answer: conditions that increase the chance of loss
▶ Peril. Answer: the actual cause of loss or damage
▶ Loss. Answer: financial loss due to an occurrence or accident
,▶ Proximate cause. Answer: the primary event or series of events that
directly leads to an insured loss
▶ Direct loss. Answer: physical harm to tangible property caused by a
peril. Ex: Tree falls on car
▶ Indirect loss. Answer: added expenses or lost income because of
physical damages. Ex: rental car
▶ Occurrence. Answer: an event, incident, or condition that causes
damage
▶ ACV (Actual Cash Value). Answer: Replacement cost - depreciation
▶ replacement cost. Answer: method of valuation based on cost of
replacing an item at current market prices, regardless of depreciation
▶ Functional replacement cost. Answer: pays to replace an outdated,
obsolete item with a functionally equivalent item
▶ Stated amount. Answer: property value is stated by the insured when
applying for insurance
▶ insurance policy. Answer: the legal contract b/w the insurer and the
insured
, ▶ cancellation and nonrenewal. Answer: insured may cancel at any time,
but the insurer is much more restricted
▶ declarations page. Answer: names of both parties
policy #
location and description of insured item
deductible
premium
▶ first named insured. Answer: the 1st person or organization listed on the
dec page
▶ additional insured. Answer: person or org. that is added to the policy at
the request of the first named insured and benefits from policy, but is not
allowed to make changed
▶ Loss Payable Clause. Answer: lender listed as loss payee if a loss
occurs
▶ policy limits. Answer: establish the max payout value of an insurance
policy
▶ salvage. Answer: the portion or value of property that remains after a
loss
QUESTIONS AND VERIFIED ANSWERS 2026
▶ Insurable Interest. Answer: direct financial interest in protecting
something or someone
▶ Lender Interest. Answer: protects a lender who loans money to a buyer
▶ Risk. Answer: potential for financial loss or an insured item
▶ Exposure. Answer: is openness to loss or damage
▶ hazard. Answer: thing that increases the possibility to loss
▶ moral hazard. Answer: results from policyholder's conscious decision
▶ physical hazard. Answer: conditions that increase the chance of loss
▶ Peril. Answer: the actual cause of loss or damage
▶ Loss. Answer: financial loss due to an occurrence or accident
,▶ Proximate cause. Answer: the primary event or series of events that
directly leads to an insured loss
▶ Direct loss. Answer: physical harm to tangible property caused by a
peril. Ex: Tree falls on car
▶ Indirect loss. Answer: added expenses or lost income because of
physical damages. Ex: rental car
▶ Occurrence. Answer: an event, incident, or condition that causes
damage
▶ ACV (Actual Cash Value). Answer: Replacement cost - depreciation
▶ replacement cost. Answer: method of valuation based on cost of
replacing an item at current market prices, regardless of depreciation
▶ Functional replacement cost. Answer: pays to replace an outdated,
obsolete item with a functionally equivalent item
▶ Stated amount. Answer: property value is stated by the insured when
applying for insurance
▶ insurance policy. Answer: the legal contract b/w the insurer and the
insured
, ▶ cancellation and nonrenewal. Answer: insured may cancel at any time,
but the insurer is much more restricted
▶ declarations page. Answer: names of both parties
policy #
location and description of insured item
deductible
premium
▶ first named insured. Answer: the 1st person or organization listed on the
dec page
▶ additional insured. Answer: person or org. that is added to the policy at
the request of the first named insured and benefits from policy, but is not
allowed to make changed
▶ Loss Payable Clause. Answer: lender listed as loss payee if a loss
occurs
▶ policy limits. Answer: establish the max payout value of an insurance
policy
▶ salvage. Answer: the portion or value of property that remains after a
loss
