PEARSON VUE: PROPERTY INSURANCE
PRACTICE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
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 - ANS C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
1
@2026 EDITION ALLRIGHTS RESERVED
,B. deductible
C. limit of liability
D. pro rata return - ANS 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 - ANS 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 - ANS C
2
@2026 EDITION ALLRIGHTS RESERVED
, Which of the following businesses would be eligible for a Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop - ANS 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 - ANS 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
3
@2026 EDITION ALLRIGHTS RESERVED
PRACTICE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
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 - ANS C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
1
@2026 EDITION ALLRIGHTS RESERVED
,B. deductible
C. limit of liability
D. pro rata return - ANS 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 - ANS 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 - ANS C
2
@2026 EDITION ALLRIGHTS RESERVED
, Which of the following businesses would be eligible for a Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop - ANS 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 - ANS 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
3
@2026 EDITION ALLRIGHTS RESERVED
