PA Appraiser Exam 2025 Questions
and Answers
Principle of Indemnity - ANSWER✔️✔️-restoration to approximate previous financial condition;
no more, no less
Insurable Interest - ANSWER✔️✔️-direct financial interest in protecting something or someone
Lender Interest - ANSWER✔️✔️-protects a lender who loans money to a buyer
Risk - ANSWER✔️✔️-potential for financial loss or an insured item
Exposure - ANSWER✔️✔️-is openness to loss or damage
hazard - ANSWER✔️✔️-thing that increases the possibility to loss
moral hazard - ANSWER✔️✔️-results from policyholder's conscious decision
physical hazard - ANSWER✔️✔️-conditions that increase the chance of loss
Peril - ANSWER✔️✔️-the actual cause of loss or damage
Loss - ANSWER✔️✔️-financial loss due to an occurrence or accident
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Proximate cause - ANSWER✔️✔️-the primary event or series of events that directly leads to an
insured loss
Direct loss - ANSWER✔️✔️-physical harm to tangible property caused by a peril. Ex: Tree falls on
car
Indirect loss - ANSWER✔️✔️-added expenses or lost income because of physical damages. Ex:
rental car
Occurrence - ANSWER✔️✔️-an event, incident, or condition that causes damage
ACV (Actual Cash Value) - ANSWER✔️✔️-Replacement cost - depreciation
replacement cost - ANSWER✔️✔️-method of valuation based on cost of replacing an item at
current market prices, regardless of depreciation
Functional replacement cost - ANSWER✔️✔️-pays to replace an outdated, obsolete item with a
functionally equivalent item
Stated amount - ANSWER✔️✔️-property value is stated by the insured when applying for
insurance
insurance policy - ANSWER✔️✔️-the legal contract b/w the insurer and the insured
cancellation and nonrenewal - ANSWER✔️✔️-insured may cancel at any time, but the insurer is
much more restricted
declarations page - ANSWER✔️✔️-names of both parties
policy #
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, location and description of insured item
deductible
premium
first named insured - ANSWER✔️✔️-the 1st person or organization listed on the dec page
additional insured - ANSWER✔️✔️-person or org. that is added to the policy at the request of the
first named insured and benefits from policy, but is not allowed to make changed
Loss Payable Clause - ANSWER✔️✔️-lender listed as loss payee if a loss occurs
policy limits - ANSWER✔️✔️-establish the max payout value of an insurance policy
salvage - ANSWER✔️✔️-the portion or value of property that remains after a loss
abandonment clause - ANSWER✔️✔️-insured is prohibited from forcing the insurer to take
possession of damaged property for the purpose of repair or disposal
subrogation - ANSWER✔️✔️-transfer of rights that allows the insurer to recover its losses after it
has indemnified a policyholder
full release settlement - ANSWER✔️✔️-all damaged paid at once
no release settlement - ANSWER✔️✔️-signing and cashing a check substitutes for the release
form
appraiser - ANSWER✔️✔️-writes damage estimates for insurance claims
adjuster - ANSWER✔️✔️-investigates claims and prepares claimant statements
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
and Answers
Principle of Indemnity - ANSWER✔️✔️-restoration to approximate previous financial condition;
no more, no less
Insurable Interest - ANSWER✔️✔️-direct financial interest in protecting something or someone
Lender Interest - ANSWER✔️✔️-protects a lender who loans money to a buyer
Risk - ANSWER✔️✔️-potential for financial loss or an insured item
Exposure - ANSWER✔️✔️-is openness to loss or damage
hazard - ANSWER✔️✔️-thing that increases the possibility to loss
moral hazard - ANSWER✔️✔️-results from policyholder's conscious decision
physical hazard - ANSWER✔️✔️-conditions that increase the chance of loss
Peril - ANSWER✔️✔️-the actual cause of loss or damage
Loss - ANSWER✔️✔️-financial loss due to an occurrence or accident
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Proximate cause - ANSWER✔️✔️-the primary event or series of events that directly leads to an
insured loss
Direct loss - ANSWER✔️✔️-physical harm to tangible property caused by a peril. Ex: Tree falls on
car
Indirect loss - ANSWER✔️✔️-added expenses or lost income because of physical damages. Ex:
rental car
Occurrence - ANSWER✔️✔️-an event, incident, or condition that causes damage
ACV (Actual Cash Value) - ANSWER✔️✔️-Replacement cost - depreciation
replacement cost - ANSWER✔️✔️-method of valuation based on cost of replacing an item at
current market prices, regardless of depreciation
Functional replacement cost - ANSWER✔️✔️-pays to replace an outdated, obsolete item with a
functionally equivalent item
Stated amount - ANSWER✔️✔️-property value is stated by the insured when applying for
insurance
insurance policy - ANSWER✔️✔️-the legal contract b/w the insurer and the insured
cancellation and nonrenewal - ANSWER✔️✔️-insured may cancel at any time, but the insurer is
much more restricted
declarations page - ANSWER✔️✔️-names of both parties
policy #
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, location and description of insured item
deductible
premium
first named insured - ANSWER✔️✔️-the 1st person or organization listed on the dec page
additional insured - ANSWER✔️✔️-person or org. that is added to the policy at the request of the
first named insured and benefits from policy, but is not allowed to make changed
Loss Payable Clause - ANSWER✔️✔️-lender listed as loss payee if a loss occurs
policy limits - ANSWER✔️✔️-establish the max payout value of an insurance policy
salvage - ANSWER✔️✔️-the portion or value of property that remains after a loss
abandonment clause - ANSWER✔️✔️-insured is prohibited from forcing the insurer to take
possession of damaged property for the purpose of repair or disposal
subrogation - ANSWER✔️✔️-transfer of rights that allows the insurer to recover its losses after it
has indemnified a policyholder
full release settlement - ANSWER✔️✔️-all damaged paid at once
no release settlement - ANSWER✔️✔️-signing and cashing a check substitutes for the release
form
appraiser - ANSWER✔️✔️-writes damage estimates for insurance claims
adjuster - ANSWER✔️✔️-investigates claims and prepares claimant statements
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
