Property Insurance Exam Practice Test All Answers Correct

Property Insurance Exam Practice Test All Answers Correct 1. What is defined as the chance that a person or business entity will suffer a financial loss? A. Gambling B. Loss exposure C. Risk D. Speculative risk Correct answer: C. Risk 2. What is defined as actual physical destruction of insured property? A. Direct loss B. Indirect loss C. Peril D. Vandalism Correct answer: A. Direct loss 3. Loose tiles hanging from the ceiling are an example of a ______ hazard. A. Mental B. Moral C. Morale D. Physical Correct answer: D. Physical 4. In a Property Insurance policy, insurable interest must be demonstrated at what point in time? A. At time of application B. At time of first payment C. At time of loss D. All of the above Correct answer: C. At time of loss 5. The primary purpose of the co-insurance condition in a Property Insurance policy is to encourage ______. A. Buying multiple policies B. Insurance to value C. Over-insuring D. Self-insurance Correct answer: B. Insurance to value 6. Who are considered incompetent to contract? A. Illegal aliens B. Mentally challenged citizens C. Minors D. Senior citizens Correct answer: A, B, C (all except D) 7. What are the major causes of loss forms in Commercial Property Insurance, except for? A. Basic B. Broad C. Earthquake D. Special Correct answer: C. Earthquake 8. Extra expense covers: A. Accounting expenses incurred to calculate your loss during a period of restoration B. Additional expenses incurred to continue operation during a period of restoration C. Direct loss of property D.Lost profit during a period of restoration Correct answer: B. Additional expenses incurred to continue operation during a pe