Level 1 Fundamentals of Insurance Practice Exam Questions And
Correct Answers 2025-2026!!
The Basis of Claim Payment is the same for all Homeowners Forms. All of the following
statements concerning the Basis of Claim Payment are true, except 1. Select the
exception:
a. Dwelling Building and Detached Private Structures are insured on a Replacement
Cost basis.
b. Personal Property is covered for Replacement Cost except electronic media and
books of account, which are subject to a special basis of settlement.
c. Artwork, antiques, memorabilia, and souvenirs are insured on an Actual Cash Value
policy.
d. Dwelling Building and Detached Private Structures are covered on a Replacement
Cost policy that also provides additional amounts related to by-law enforcement
upgrade costs. - ANSWER>>d
Under all Homeowners Forms the coverage for certain Personal Property articles is
limited to "special Limits of Insurance", unless the insured has purchased additional
insurance. All of the following objects are subject to "Special Limits", except one.
Choose the exception: a. Computer games and other software with a combined value of
$3,600. b. A mountain bike valued at $6,000. c. A coin collection valued at $1,200.
d. A gold watch valued at $1,800. - ANSWER>>d
Personal Property temporarily removed is insured under the Homeowners Forms is
covered:
a. When normally kept at any other location owned by the insured.
b. Anywhere in the world.
c. Only in North America excluding Mexico.
d. Only in Canada, Mexico or the United States of America. - ANSWER>>b
The windstorm or hail provided by the Homeowners' Basic Form IBC 1151 would pay for
,the following loss or damage to:
a. Dwelling building shingles.
b. Satellite dish.
c. Interior of building by rain which entered through an open window.
d. Insured's waterfront dwelling caused by high waves which resulted directly from a
severe windstorm. - ANSWER>>a
The following loss is covered under the Homeowners' Basic Form IBC 1151:
a. Water hammer
b. Damage from rupturing of heating, plumbing, or air conditioning systems
c. Smoke seepage from fireplaces
d. Killing a family dog upon impact- ANSWER>>b
Your client is a condominium owner and currently insured under IBC 1165 Condominium
Unit Owners Package, that includes Loss Assessment coverage. She does not believe
that this coverage is significant. You advise her herein that the Loss Assessment
coverage would respond to all of the following claims, except one. Pick the Exception.
a. That portion of the cost of replacing personal property damaged by fire due to an
inadequate limit under her own policy.
b. Payment for part of a water damage loss to common area due to a high deductible
under the condominium corporation's policy.
c. Payment for a loss to jointly owned property, which was not covered under the
condominium corporation's policy.
d. To pay for part of an insured loss under the building because of the co-insurance
penalty applied to the corporation by its insurer. - ANSWER>>a
A loss of money by actual destruction, disappearance or wrongful abstraction would be
property insured under which of the following policies:
a. Burglary Policy.
b. Robbery Policy.
c. Interior Messenger and Paymaster Robbery (Hold-up) Policy.
, d. Money and Securities (Broad Form). - ANSWER>>d
The Installation Floater is for contractors who install machinery and equipment. The
following property is NOT covered under this floater:
a. Property in warehouse on the insured's premises.
b. Property while in transit to the job site.
c. Property awaiting installation at the job site.
d. Property while being installed at the job site. - ANSWER>>a
Coverage provided for an insured's records under most policies of commercial property
insurance is limited to:
a. 20% of limit of insurance purchased on equipment.
b. Those costs to gather, assemble and transcribe lost information.
c. Blank value only.
d. 50% of value of manual records and 75% of value of automated records. -
ANSWER>>c
The additional rate or premium charged by the underwriter to pay for additional perils
insured under a commercial property insurance policy is known as:
a. A surcharge.
b. A loading.
c. The base rate.
d. A premium charge back. - ANSWER>>b
The reinstatement clause contained in most policies of commercial property insurance
provides that:
a. The Insureds shall have as much insurance on property after an insured loss as they
had immediately prior to it.
b. Cover that is suspended because of a policy condition breach automatically
reinstates upon the curing of such breach.
Correct Answers 2025-2026!!
The Basis of Claim Payment is the same for all Homeowners Forms. All of the following
statements concerning the Basis of Claim Payment are true, except 1. Select the
exception:
a. Dwelling Building and Detached Private Structures are insured on a Replacement
Cost basis.
b. Personal Property is covered for Replacement Cost except electronic media and
books of account, which are subject to a special basis of settlement.
c. Artwork, antiques, memorabilia, and souvenirs are insured on an Actual Cash Value
policy.
d. Dwelling Building and Detached Private Structures are covered on a Replacement
Cost policy that also provides additional amounts related to by-law enforcement
upgrade costs. - ANSWER>>d
Under all Homeowners Forms the coverage for certain Personal Property articles is
limited to "special Limits of Insurance", unless the insured has purchased additional
insurance. All of the following objects are subject to "Special Limits", except one.
Choose the exception: a. Computer games and other software with a combined value of
$3,600. b. A mountain bike valued at $6,000. c. A coin collection valued at $1,200.
d. A gold watch valued at $1,800. - ANSWER>>d
Personal Property temporarily removed is insured under the Homeowners Forms is
covered:
a. When normally kept at any other location owned by the insured.
b. Anywhere in the world.
c. Only in North America excluding Mexico.
d. Only in Canada, Mexico or the United States of America. - ANSWER>>b
The windstorm or hail provided by the Homeowners' Basic Form IBC 1151 would pay for
,the following loss or damage to:
a. Dwelling building shingles.
b. Satellite dish.
c. Interior of building by rain which entered through an open window.
d. Insured's waterfront dwelling caused by high waves which resulted directly from a
severe windstorm. - ANSWER>>a
The following loss is covered under the Homeowners' Basic Form IBC 1151:
a. Water hammer
b. Damage from rupturing of heating, plumbing, or air conditioning systems
c. Smoke seepage from fireplaces
d. Killing a family dog upon impact- ANSWER>>b
Your client is a condominium owner and currently insured under IBC 1165 Condominium
Unit Owners Package, that includes Loss Assessment coverage. She does not believe
that this coverage is significant. You advise her herein that the Loss Assessment
coverage would respond to all of the following claims, except one. Pick the Exception.
a. That portion of the cost of replacing personal property damaged by fire due to an
inadequate limit under her own policy.
b. Payment for part of a water damage loss to common area due to a high deductible
under the condominium corporation's policy.
c. Payment for a loss to jointly owned property, which was not covered under the
condominium corporation's policy.
d. To pay for part of an insured loss under the building because of the co-insurance
penalty applied to the corporation by its insurer. - ANSWER>>a
A loss of money by actual destruction, disappearance or wrongful abstraction would be
property insured under which of the following policies:
a. Burglary Policy.
b. Robbery Policy.
c. Interior Messenger and Paymaster Robbery (Hold-up) Policy.
, d. Money and Securities (Broad Form). - ANSWER>>d
The Installation Floater is for contractors who install machinery and equipment. The
following property is NOT covered under this floater:
a. Property in warehouse on the insured's premises.
b. Property while in transit to the job site.
c. Property awaiting installation at the job site.
d. Property while being installed at the job site. - ANSWER>>a
Coverage provided for an insured's records under most policies of commercial property
insurance is limited to:
a. 20% of limit of insurance purchased on equipment.
b. Those costs to gather, assemble and transcribe lost information.
c. Blank value only.
d. 50% of value of manual records and 75% of value of automated records. -
ANSWER>>c
The additional rate or premium charged by the underwriter to pay for additional perils
insured under a commercial property insurance policy is known as:
a. A surcharge.
b. A loading.
c. The base rate.
d. A premium charge back. - ANSWER>>b
The reinstatement clause contained in most policies of commercial property insurance
provides that:
a. The Insureds shall have as much insurance on property after an insured loss as they
had immediately prior to it.
b. Cover that is suspended because of a policy condition breach automatically
reinstates upon the curing of such breach.
