CIC Commercial Property Exam 2026
Questions and Answers
Actual Cash Value (ACV) - Correct answer-replacement cost less an allowance for
insurance depreciation, wear and tear, or obsolescence
Advance premium - Correct answer-initial premium paid to begin coverage on a
policy
Agreed Value - Correct answer-a limit agreed upon by the underwriter and Named
Insured that is deemed adequate, therefore, suspending the coinsurance clause
Bailee - Correct answer-person or organization that has possession of the property
of others, usually for storage, repair, or servicing
Bailment - Correct answer-situation in which property of one has been entrusted to
another. A bailment can be for the benefit of either party or both. The degree of
care owed by the bailee to the bailor differs according to who has the benefit of the
bailment.
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, Coinsurance - Correct answer-a rating and underwriting concept that is designed to
encourage an insured to purchase an amount of insurance nearly equal to or equal
to the full value of the property being insured
Demand surge - Correct answer-increased costs of rebuilding following a disaster
Final premium - Correct answer-determined at the end of the policy year based on
average reports of valued submitted by the insured
Inflation Guard - Correct answer-a feature that increases the amount of an
insurance benefit by a fixed percentage automatically every year, to adjust for
inflation
Insurable interest - Correct answer-the existence of potential financial loss, or
having a legal or financial relationship in the value of the subject of insurance, on
the part of the policy owner and/or beneficiary in the event of a payable Covered
Cause of Loss
Named Insured - Correct answer-a person or entity specifically named and listed
on an insurance policy Declarations under the Named Insured section
Replacement Cost - Correct answer-cost to replace damaged property with like
kind and quality without taking into account depreciation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Questions and Answers
Actual Cash Value (ACV) - Correct answer-replacement cost less an allowance for
insurance depreciation, wear and tear, or obsolescence
Advance premium - Correct answer-initial premium paid to begin coverage on a
policy
Agreed Value - Correct answer-a limit agreed upon by the underwriter and Named
Insured that is deemed adequate, therefore, suspending the coinsurance clause
Bailee - Correct answer-person or organization that has possession of the property
of others, usually for storage, repair, or servicing
Bailment - Correct answer-situation in which property of one has been entrusted to
another. A bailment can be for the benefit of either party or both. The degree of
care owed by the bailee to the bailor differs according to who has the benefit of the
bailment.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Coinsurance - Correct answer-a rating and underwriting concept that is designed to
encourage an insured to purchase an amount of insurance nearly equal to or equal
to the full value of the property being insured
Demand surge - Correct answer-increased costs of rebuilding following a disaster
Final premium - Correct answer-determined at the end of the policy year based on
average reports of valued submitted by the insured
Inflation Guard - Correct answer-a feature that increases the amount of an
insurance benefit by a fixed percentage automatically every year, to adjust for
inflation
Insurable interest - Correct answer-the existence of potential financial loss, or
having a legal or financial relationship in the value of the subject of insurance, on
the part of the policy owner and/or beneficiary in the event of a payable Covered
Cause of Loss
Named Insured - Correct answer-a person or entity specifically named and listed
on an insurance policy Declarations under the Named Insured section
Replacement Cost - Correct answer-cost to replace damaged property with like
kind and quality without taking into account depreciation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
