Pearson VUE: Property Insurance Practice Exam
Questions And Correct Answers
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. $100,000
B. $90,000
C. $80,000
D. $20,000
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
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
C. overflow of tidal waters
D. water-main breakage
D
Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
C. Is limited by the named exclusions
D. Includes no exclusions
C
Which of the following businesses would be eligible for a Businessowners
policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop
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
C
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
C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
D. Cause
Questions And Correct Answers
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. $100,000
B. $90,000
C. $80,000
D. $20,000
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
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
C. overflow of tidal waters
D. water-main breakage
D
Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
C. Is limited by the named exclusions
D. Includes no exclusions
C
Which of the following businesses would be eligible for a Businessowners
policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop
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
C
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
C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
D. Cause
