CIC COMMERCIAL PROPERTY STUDY GUIDE EXAM
QUESTIONS AND SOLUTIONS 2025/2026 RATED A+
✔✔Optional Coverages available under the Building And Personal Property Coverage
Form - ✔✔1. Agreed Value
2. Inflation Guard
3. Replacement Cost
4. Extension Of Replacement Cost To Personal Property Of Others
✔✔Agreed Value - ✔✔the Agreed Value Optional Coverage suspends the coinsurance
requirement.
Note that the Agreed Value option carries an additional premium charge of 5%.
✔✔Inflation Guard - ✔✔When Inflation Guard is triggered, the Limit of Insurance is
increased by the percentage shown in the Declarations. The Limit is increased daily
throughout the policy period, and the premium is charged pro-rata, meaning that an 8%
annual increase will incur a 4% additional premium.
✔✔Replacement Cost - ✔✔This Optional Coverage replaces ACV in the Valuation Loss
Condition. Replacement cost does not apply to:
• Personal property of others (does not include tenants' improvements and betterments)
• Contents of a residence
• Works of art, antiques, or rare articles
• "Stock," unless the Including "Stock" option is shown in the Declarations
Under this Optional Coverage, the policy will pay the least of:
• the applicable Limit of Insurance, •
the cost to replace with other property that is of comparable material and quality and
that is used for the same purpose, or
• the amount actually spent that is necessary to repair or replace the property.
✔✔Increase In Rebuilding Expenses Following Disaster (Additional Expense Coverage
On Annual Aggregate Basis) Endorsement - ✔✔This endorsement increases the Limit
of Insurance for expenses for labor and/or building materials for repair or replacement of
property damaged as the result of a disaster if the total cost of repair or replacement
exceeds the applicable Limit of Insurance due to such increase in expenses
✔✔Extension Of Replacement Cost To Personal Property Of Others - ✔✔There are two
actions required for this Optional Coverage to apply:
1. The Replacement Cost Optional Coverage must be shown in the Declarations.
2. If this Extension is shown as applicable in the Declarations, paragraph 3.b.(1) will be
deleted and Replacement Cost coverage will be triggered for personal property of
others.
, Payment for the replacement cost of personal property of others is limited to the lesser
of:
• the amount required by contract (if in place), or
• the replacement cost of the property.
✔✔Scheduled Building Property Tenant's Policy
Unscheduled Building Property Tenant's Policy - ✔✔endorsements available to cover
building property when the Named Insured is a tenant and is contractually obligated to
insure this property, or when the tenant contractually assumes responsibility for loss or
damage:
✔✔Causes Of Loss - Basic Form - ✔✔- Fire
- Lightning
- Explosion
- Windstorm or Hail
- Smoke
- Aircraft or Vehicles
- Riot or Civil Commotion
- Vandalism
- Sprinkler Leakage
- Sinkhole Collapse
- Volcanic Action
- Additional Coverage - Limited Coverage for "Fungus," Wet Rot, Dry Rot And Bacteria.
✔✔Causes Of Loss - Broad Form - ✔✔- Basic Form Named Perils
- Falling Objects
- Weight of Snow, Ice, or Sleet
- Water Damage
✔✔Causes Of Loss - Special Form - ✔✔open perils basis, means that a peril must be
excluded or limited by the policy language for coverage to be denied.
✔✔Causes Of Loss - Special Form Exclusion Categories - ✔✔• Paragraph 1:
Concurrent Causation/Sequential Causation Exclusions
• Paragraph 2: Concurrent Causation Exclusions
• Paragraph 3: Conditional Exclusions
• Paragraph 4: Special Exclusions
• Paragraph 5: Additional Exclusion
✔✔Paragraph 1: Concurrent Causation/Sequential Causation Exclusions - ✔✔-
Ordinance or Law
- Earth Movement
- Governmental Action
- Nuclear Hazard
- Utility Services
QUESTIONS AND SOLUTIONS 2025/2026 RATED A+
✔✔Optional Coverages available under the Building And Personal Property Coverage
Form - ✔✔1. Agreed Value
2. Inflation Guard
3. Replacement Cost
4. Extension Of Replacement Cost To Personal Property Of Others
✔✔Agreed Value - ✔✔the Agreed Value Optional Coverage suspends the coinsurance
requirement.
Note that the Agreed Value option carries an additional premium charge of 5%.
✔✔Inflation Guard - ✔✔When Inflation Guard is triggered, the Limit of Insurance is
increased by the percentage shown in the Declarations. The Limit is increased daily
throughout the policy period, and the premium is charged pro-rata, meaning that an 8%
annual increase will incur a 4% additional premium.
✔✔Replacement Cost - ✔✔This Optional Coverage replaces ACV in the Valuation Loss
Condition. Replacement cost does not apply to:
• Personal property of others (does not include tenants' improvements and betterments)
• Contents of a residence
• Works of art, antiques, or rare articles
• "Stock," unless the Including "Stock" option is shown in the Declarations
Under this Optional Coverage, the policy will pay the least of:
• the applicable Limit of Insurance, •
the cost to replace with other property that is of comparable material and quality and
that is used for the same purpose, or
• the amount actually spent that is necessary to repair or replace the property.
✔✔Increase In Rebuilding Expenses Following Disaster (Additional Expense Coverage
On Annual Aggregate Basis) Endorsement - ✔✔This endorsement increases the Limit
of Insurance for expenses for labor and/or building materials for repair or replacement of
property damaged as the result of a disaster if the total cost of repair or replacement
exceeds the applicable Limit of Insurance due to such increase in expenses
✔✔Extension Of Replacement Cost To Personal Property Of Others - ✔✔There are two
actions required for this Optional Coverage to apply:
1. The Replacement Cost Optional Coverage must be shown in the Declarations.
2. If this Extension is shown as applicable in the Declarations, paragraph 3.b.(1) will be
deleted and Replacement Cost coverage will be triggered for personal property of
others.
, Payment for the replacement cost of personal property of others is limited to the lesser
of:
• the amount required by contract (if in place), or
• the replacement cost of the property.
✔✔Scheduled Building Property Tenant's Policy
Unscheduled Building Property Tenant's Policy - ✔✔endorsements available to cover
building property when the Named Insured is a tenant and is contractually obligated to
insure this property, or when the tenant contractually assumes responsibility for loss or
damage:
✔✔Causes Of Loss - Basic Form - ✔✔- Fire
- Lightning
- Explosion
- Windstorm or Hail
- Smoke
- Aircraft or Vehicles
- Riot or Civil Commotion
- Vandalism
- Sprinkler Leakage
- Sinkhole Collapse
- Volcanic Action
- Additional Coverage - Limited Coverage for "Fungus," Wet Rot, Dry Rot And Bacteria.
✔✔Causes Of Loss - Broad Form - ✔✔- Basic Form Named Perils
- Falling Objects
- Weight of Snow, Ice, or Sleet
- Water Damage
✔✔Causes Of Loss - Special Form - ✔✔open perils basis, means that a peril must be
excluded or limited by the policy language for coverage to be denied.
✔✔Causes Of Loss - Special Form Exclusion Categories - ✔✔• Paragraph 1:
Concurrent Causation/Sequential Causation Exclusions
• Paragraph 2: Concurrent Causation Exclusions
• Paragraph 3: Conditional Exclusions
• Paragraph 4: Special Exclusions
• Paragraph 5: Additional Exclusion
✔✔Paragraph 1: Concurrent Causation/Sequential Causation Exclusions - ✔✔-
Ordinance or Law
- Earth Movement
- Governmental Action
- Nuclear Hazard
- Utility Services
