Pearson VUE: Property Insurance
Practice Exam Questions with Verified
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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
Practice Exam Questions with Verified
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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-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 - Answer-C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
