Pearson VUE: Property Insurance Practice
Exam/ Q&A.
In order to issue a written binder for a commercial property policy, what is the
MINIMUM consideration a producer must secure from an applicant?
A. A promise to pay the premium
B. A signature on a premium finance agreement
C. Payment of six months' premium
D. Payment of twelve months' premium - Answer: A
An insured owns a set of six drawing pens designed and used by Benjamin
Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is
destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a
MAXIMUM of which of the following amounts?
A. $1,000
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,B. $2,000
C. $7,000
D. $12,000 - Answer: C
Pro-rata cancellation occurs when:
A. a policy is nonrenewed
B. a mortgage has been satisfied
C. an insured cancels a policy at inception
D. an insurer cancels a policy at any time - Answer: D
Inland Marine insurance is commonly used to insure all of the following items
EXCEPT:
A. automobiles
B. stamps
C. camera equipment
D. jewelry - Answer: A
A primary obligation of an insurer is to:
A. pay the claims covered under the policy
B. provide a financial statement with each policy
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, C. make inspections and surveys of insured property
D. prepare an inventory after a loss - Answer: A
An applicant's statement included in the insurance contract that the property to
be insured has an operable sprinkler system is:
A. agency binding authority
B. a warranty
C. a representation
D. an affidavit - Answer: B
Which of the following terms BEST describes continuous and repeated exposure
to conditions that are neither expected nor intended by the insured?
A. Negligence
B. Liability
C. Accident
D. Occurrence - Answer: D
Which of the following statements about a mortgagee's rights under the Dwelling
Property Basic Form (DP-1) is INCORRECT?
A. No act by the insured will jeopardize the mortgagee's rights.
B. The mortgagee may file a Proof of Loss if the insured fails to do so.
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Exam/ Q&A.
In order to issue a written binder for a commercial property policy, what is the
MINIMUM consideration a producer must secure from an applicant?
A. A promise to pay the premium
B. A signature on a premium finance agreement
C. Payment of six months' premium
D. Payment of twelve months' premium - Answer: A
An insured owns a set of six drawing pens designed and used by Benjamin
Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is
destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a
MAXIMUM of which of the following amounts?
A. $1,000
Page 1 of 18
,B. $2,000
C. $7,000
D. $12,000 - Answer: C
Pro-rata cancellation occurs when:
A. a policy is nonrenewed
B. a mortgage has been satisfied
C. an insured cancels a policy at inception
D. an insurer cancels a policy at any time - Answer: D
Inland Marine insurance is commonly used to insure all of the following items
EXCEPT:
A. automobiles
B. stamps
C. camera equipment
D. jewelry - Answer: A
A primary obligation of an insurer is to:
A. pay the claims covered under the policy
B. provide a financial statement with each policy
Page 2 of 18
, C. make inspections and surveys of insured property
D. prepare an inventory after a loss - Answer: A
An applicant's statement included in the insurance contract that the property to
be insured has an operable sprinkler system is:
A. agency binding authority
B. a warranty
C. a representation
D. an affidavit - Answer: B
Which of the following terms BEST describes continuous and repeated exposure
to conditions that are neither expected nor intended by the insured?
A. Negligence
B. Liability
C. Accident
D. Occurrence - Answer: D
Which of the following statements about a mortgagee's rights under the Dwelling
Property Basic Form (DP-1) is INCORRECT?
A. No act by the insured will jeopardize the mortgagee's rights.
B. The mortgagee may file a Proof of Loss if the insured fails to do so.
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