2025 FUNDAMENTALS OF INSURANCE STUDY GUIDE EVALUATIOM
QUESTIONS WITH ANSWERS GRADED A+ 2025/2026
The homeowners forms contain a number of extensions of coverage. One such
coverage is that for freezer food. All of the following statement respecting this extension
of coverage are true, except one. Pick the exception.
a. Coverage is provided when there is an accidental interruption of electrical power on
or off the insured's premises
b. Coverage is provided for loss of freezer food due to mechanical breakdown of the
food freezer
c. Coverage is provided for loss to freezer food due to the accidental or intential
disconnection of the power supply or the operation of circuit breakers of fuses
d. Coverage is provided for damage to a food freezer when it is due to food spoilage
coverage by this extension - c. Coverage is provided for loss to freezer food due to the
accidental or intential disconnection of the power supply or the operation of circuit
breakers of fuses
Homeowners forms provide limited coverage for outdoor trees, shrubs, and plants.
There is no coverage for loss or damage caused by peril:
a. Lightening
b. Impact by land vehicle
c. Vandalism or Malicious Acts
d. Windstorm - d. Windstorms
Your client recently purchased a homeowners comprehensive form (IBC 1155) which
she was told covered her property for "all risks" of direct physical loss or damage. Last
week, her home was broken into and 30,000 in jewelry was stolen. The insurance
company would pay:
a. 2,000
b. 5,000
c. 30,000
d. 50% immediately and the remaining 50% upon replacement of the jewelry - a. 2,000
Under the homeowners forms, all of the following personal property items are subject to
special limits of insurance, except one. Pick the exception.
a. books, tools, and instruments relating to a business, profession or occupation
b. Watercraft, including equipment
c. Computer Hardware
d. Money - c. Computer hardware
The additional living expenses coverage provided under the homeowners forms:
,a. Pays those increased costs only, if any, for temporary accommodations occupied by
the insured after an insured loss
b. Pays all costs as incurred by the insured for food, transportation, and
accommodations after an insured loss
c. Pays those increased costs for items such as food, transportation, and
accommodations which are incurred by the insured after an insured loss, so long as
such costs do not serve to increase the insured's standard of living
d. Pays all mortgage payments which the insured must continue to make after an
insured loss - c. Pays those increased costs for items such as food, transportation, and
accommodations which are incurred by the insured after an insured loss, so long as
such costs do not serve to increase the insured's standard of living
Personal property insured on the homeowners form is covered:
a. Only at the location described on the coverage summary page
b. Anywhere in the world
c. Anywhere in North America excluding Mexico
d. Anywhere in Canada, Mexico, or the United States - b. Anywhere in the world
Under the homeowners basic form (IBC 1151), only the following loss is covered:
a. Water hammer
b. Damage to a garage door caused by a vehicle driven by insured
c. Smoke damage due to the faulty operation of the basement furnace
d. Sewer backup - c. Smoke damage due to the faulty operation of the basement
furnace
Loss caused by freezing during the usual heating season is covered by homeowners
forms. However, when the insureds are away for more than four consecutive days, the
must:
a. Advise the insurer that the dwelling building will be occupied
b. Obtain written permission from the insurer for continuation of coverage during the
period of no-occupancy
c. Ensure all windows and doors are securely locked and heating maintained
d. Arrange for a competent person to enter the dwelling daily to ensure heating is being
maintained or shut the water supply off and drain all pipes and appliances - d. Arrange
for a competent person to enter the dwelling daily to ensure heating is being maintained
or shut the water supply off and drain all pipes and appliances
The windstorm or hail coverage provided by the homeowners basic form (IBC 1151)
would pay for the following loss or damage only:
a. Damage to dwelling building shingles
b. Damage to satellite dish
c. Damage to interior of building by rain which entered through an open window
, d. Damage to insureds waterfront dwelling caused by high waves, which resulted
directly from a severe thunderstorm - b. Damage to a satellite dish
While the glass breakage coverage provided by the homeowners basic form (IBC 1151)
is very broad, there is no coverage for:
a. Damage to glass in picture window due to shifting of the ground or other earth
movement
b. Damage to lamp which broke when accidentally knocked off night stand
c. Damage caused by vandals to glass in garage door
d. Damage to glass in screen door which broke when insureds son accidental shot a
hockey puck through it - b. Damage to lamp which broke when accidentally knocked off
night stand
All of the following coverages are provided to commercial property insured under the
broad form, except one. Pick the exception:
a. Smoke from agricultural smudging or industrial operations
b. Collapse of building due to snow or ice load
c. Loss or damage caused by land vehicles
d. Theft of stock and equipment - a. Smoke from agricultural smudging or industrial
operations
Generally, the fire rate charged by the insured on a commercial property insurance will
not be effected by:
a. The type of building construction
b. The occupancy or use of the building by the insured
c. The level of available fire protection
d. The type of burglar protection system installed - d. The type of burglar protection
system installed
The named perils form and broad form insure the property of a business. All of the
following items would be insured within the limit of insurance selected for "stock" except
one. Pick the exception:
a. Advertising materials
b. Packing and wrapping materials
c. Leased photocopier
d. Similar property of others for which the insured is legally liable - c. Leased
photocopier
The named perils form and broad insure the property of a business. Your client, a
dentist, is a tenant in a building formerly occupied by a hairdresser. When her took
possession of the building, the dentist made several building improvements and
QUESTIONS WITH ANSWERS GRADED A+ 2025/2026
The homeowners forms contain a number of extensions of coverage. One such
coverage is that for freezer food. All of the following statement respecting this extension
of coverage are true, except one. Pick the exception.
a. Coverage is provided when there is an accidental interruption of electrical power on
or off the insured's premises
b. Coverage is provided for loss of freezer food due to mechanical breakdown of the
food freezer
c. Coverage is provided for loss to freezer food due to the accidental or intential
disconnection of the power supply or the operation of circuit breakers of fuses
d. Coverage is provided for damage to a food freezer when it is due to food spoilage
coverage by this extension - c. Coverage is provided for loss to freezer food due to the
accidental or intential disconnection of the power supply or the operation of circuit
breakers of fuses
Homeowners forms provide limited coverage for outdoor trees, shrubs, and plants.
There is no coverage for loss or damage caused by peril:
a. Lightening
b. Impact by land vehicle
c. Vandalism or Malicious Acts
d. Windstorm - d. Windstorms
Your client recently purchased a homeowners comprehensive form (IBC 1155) which
she was told covered her property for "all risks" of direct physical loss or damage. Last
week, her home was broken into and 30,000 in jewelry was stolen. The insurance
company would pay:
a. 2,000
b. 5,000
c. 30,000
d. 50% immediately and the remaining 50% upon replacement of the jewelry - a. 2,000
Under the homeowners forms, all of the following personal property items are subject to
special limits of insurance, except one. Pick the exception.
a. books, tools, and instruments relating to a business, profession or occupation
b. Watercraft, including equipment
c. Computer Hardware
d. Money - c. Computer hardware
The additional living expenses coverage provided under the homeowners forms:
,a. Pays those increased costs only, if any, for temporary accommodations occupied by
the insured after an insured loss
b. Pays all costs as incurred by the insured for food, transportation, and
accommodations after an insured loss
c. Pays those increased costs for items such as food, transportation, and
accommodations which are incurred by the insured after an insured loss, so long as
such costs do not serve to increase the insured's standard of living
d. Pays all mortgage payments which the insured must continue to make after an
insured loss - c. Pays those increased costs for items such as food, transportation, and
accommodations which are incurred by the insured after an insured loss, so long as
such costs do not serve to increase the insured's standard of living
Personal property insured on the homeowners form is covered:
a. Only at the location described on the coverage summary page
b. Anywhere in the world
c. Anywhere in North America excluding Mexico
d. Anywhere in Canada, Mexico, or the United States - b. Anywhere in the world
Under the homeowners basic form (IBC 1151), only the following loss is covered:
a. Water hammer
b. Damage to a garage door caused by a vehicle driven by insured
c. Smoke damage due to the faulty operation of the basement furnace
d. Sewer backup - c. Smoke damage due to the faulty operation of the basement
furnace
Loss caused by freezing during the usual heating season is covered by homeowners
forms. However, when the insureds are away for more than four consecutive days, the
must:
a. Advise the insurer that the dwelling building will be occupied
b. Obtain written permission from the insurer for continuation of coverage during the
period of no-occupancy
c. Ensure all windows and doors are securely locked and heating maintained
d. Arrange for a competent person to enter the dwelling daily to ensure heating is being
maintained or shut the water supply off and drain all pipes and appliances - d. Arrange
for a competent person to enter the dwelling daily to ensure heating is being maintained
or shut the water supply off and drain all pipes and appliances
The windstorm or hail coverage provided by the homeowners basic form (IBC 1151)
would pay for the following loss or damage only:
a. Damage to dwelling building shingles
b. Damage to satellite dish
c. Damage to interior of building by rain which entered through an open window
, d. Damage to insureds waterfront dwelling caused by high waves, which resulted
directly from a severe thunderstorm - b. Damage to a satellite dish
While the glass breakage coverage provided by the homeowners basic form (IBC 1151)
is very broad, there is no coverage for:
a. Damage to glass in picture window due to shifting of the ground or other earth
movement
b. Damage to lamp which broke when accidentally knocked off night stand
c. Damage caused by vandals to glass in garage door
d. Damage to glass in screen door which broke when insureds son accidental shot a
hockey puck through it - b. Damage to lamp which broke when accidentally knocked off
night stand
All of the following coverages are provided to commercial property insured under the
broad form, except one. Pick the exception:
a. Smoke from agricultural smudging or industrial operations
b. Collapse of building due to snow or ice load
c. Loss or damage caused by land vehicles
d. Theft of stock and equipment - a. Smoke from agricultural smudging or industrial
operations
Generally, the fire rate charged by the insured on a commercial property insurance will
not be effected by:
a. The type of building construction
b. The occupancy or use of the building by the insured
c. The level of available fire protection
d. The type of burglar protection system installed - d. The type of burglar protection
system installed
The named perils form and broad form insure the property of a business. All of the
following items would be insured within the limit of insurance selected for "stock" except
one. Pick the exception:
a. Advertising materials
b. Packing and wrapping materials
c. Leased photocopier
d. Similar property of others for which the insured is legally liable - c. Leased
photocopier
The named perils form and broad insure the property of a business. Your client, a
dentist, is a tenant in a building formerly occupied by a hairdresser. When her took
possession of the building, the dentist made several building improvements and
