Pearson VUE: Property Insurance Practice Exam Verified Answers
1. To avoid a coinsurance penalty, S should purchase a policy with a minimum limit of at least how much
to cover a commercial building with a replacement cost of $100,000?
Answer: C. $80,000
2. What is the maximum amount a policy will pay in the event of a loss?
Answer: C. Limit of liability
3. The National Flood Insurance Program provides coverage for losses caused by all of the following
occurrences, except:
Answer: D. Water-main breakage
4. Which type of insurance policy provides coverage against all perils not specifically excluded?
Answer: C. Special Form or Open Perils coverage
5. Which business would be eligible for a Businessowners policy?
Answer: A. Auto body shop
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 ✔️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 ✔️C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
D. Cause ✔️A
The Personal Liability section of a Homeowners policy covers which of the following options?
, A. Damage to an insured's property caused by a visitor
B. Bodily injury to a resident caused by a neighbor's dog
C. Property damage caused by war
D. Bodily injury caused by the personal activities of an insured ✔️D
An insured owns an antique marble statue valued at $3,000, which is covered under a Personal Articles
Floater. Damage to the statue would be covered in all of the following situations EXCEPT:
A. it was accidentally damaged by a housekeeper
B. it was damaged in a flood
C. a guest of the insured maliciously damaged it
D. the insured threw it ✔️D
Which of the following sources may be used to provide property insurability information?
A. Police records
B. Physical inspections
C. Checking account statements
D. Lie detector tests ✔️B
1. To avoid a coinsurance penalty, S should purchase a policy with a minimum limit of at least how much
to cover a commercial building with a replacement cost of $100,000?
Answer: C. $80,000
2. What is the maximum amount a policy will pay in the event of a loss?
Answer: C. Limit of liability
3. The National Flood Insurance Program provides coverage for losses caused by all of the following
occurrences, except:
Answer: D. Water-main breakage
4. Which type of insurance policy provides coverage against all perils not specifically excluded?
Answer: C. Special Form or Open Perils coverage
5. Which business would be eligible for a Businessowners policy?
Answer: A. Auto body shop
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 ✔️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 ✔️C
Which of the following terms is defined as the uncertainty of future outcome?
A. Risk
B. Hazard
C. Peril
D. Cause ✔️A
The Personal Liability section of a Homeowners policy covers which of the following options?
, A. Damage to an insured's property caused by a visitor
B. Bodily injury to a resident caused by a neighbor's dog
C. Property damage caused by war
D. Bodily injury caused by the personal activities of an insured ✔️D
An insured owns an antique marble statue valued at $3,000, which is covered under a Personal Articles
Floater. Damage to the statue would be covered in all of the following situations EXCEPT:
A. it was accidentally damaged by a housekeeper
B. it was damaged in a flood
C. a guest of the insured maliciously damaged it
D. the insured threw it ✔️D
Which of the following sources may be used to provide property insurability information?
A. Police records
B. Physical inspections
C. Checking account statements
D. Lie detector tests ✔️B
