Pearson VUE Property Insurance Practice Exam (Latest Updates)Questions & Answers 100% Correct {Grade A}

Pearson VUE: Property Insurance Practice
Exam (Latest Updates)
Questions & Answers 100% Correct
{Grade A}

In order to issue a written binder for a commercial property policy, what is the

MINIMUM consideration a producer must secure from an applicant?



A. A promise to pay the premium



B. A signature on a premium finance agreement



C. Payment of six months' premium



D. Payment of twelve months' premium - correct answer A



An insured owns a set of six drawing pens designed and used by Benjamin Franklin.

Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a

covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which

of the following amounts?



A. $1,000

,B. $2,000



C. $7,000



D. $12,000 - correct answer C



Pro-rata cancellation occurs when:



A. a policy is nonrenewed



B. a mortgage has been satisfied



C. an insured cancels a policy at inception



D. an insurer cancels a policy at any time - correct answer D



Inland Marine insurance is commonly used to insure all of the following items EXCEPT:



A. automobiles



B. stamps

, C. camera equipment



D. jewelry - correct answer A



A primary obligation of an insurer is to:



A. pay the claims covered under the policy



B. provide a financial statement with each policy



C. make inspections and surveys of insured property



D. prepare an inventory after a loss - correct answer A



An applicant's statement included in the insurance contract that the property to be

insured has an operable sprinkler system is:



A. agency binding authority



B. a warranty