Exam FX Insurance Practice Exam Questions
with Correct Answers 100% Pass
The causes of loss insured against in an insurance policy are known as - ANSWER✔✔-
Perils
Before an insurer will pay any loss under a policy, what is usually required from the
insured? - ANSWER✔✔-Proof of loss
An insured works outside the home. The insured's sister lives with him and cares for
his four children. When the insured's home is severely damaged by fire, the family
moves into an apartment while repairs are being made. The largest apartment available
in the area has two bedrooms, so the insured's sister has to stay at a motel. How much
will the HO-3 form pay for these additional living expense? - ANSWER✔✔-All of the
expense up to the Coverage D limit
All of the following statements concerning coinsurance are true EXCEPT -
ANSWER✔✔-The coinsurance formula will also be applied to total losses.
What insurance policy provision defines how the policy will respond if there is more
than one insurance policy written on the same risk? - ANSWER✔✔-Other insurance
What is the purpose of the coinsurance clause found in property insurance policies? -
ANSWER✔✔-Encourage the insured to insure the property closer to its full value
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,With respect to the business of insurance, a hazard is - ANSWER✔✔-Any condition or
exposure that increases the possibility of loss.
A building is insured, but no one has lived or worked in it for 10 years. The building is
completely empty of any furniture or personal belongings. From an insurance
standpoint, the building is considered - ANSWER✔✔-Vacant
For the reported losses of an insured group to become more likely to equal the statistical
probability of loss for that particular class, the insured group must become -
ANSWER✔✔-Larger
The businessowners policy liability coverage will pay for necessary medical expenses of
others incurred within what maximum time period? - ANSWER✔✔-1 year
An insured is driving her auto and strikes a large pothole, causing a flat tire. Which
coverage of the insured's personal auto policy will pay for the repair? - ANSWER✔✔-
This loss is not covered
Which of the following coverages in dwelling and homeowners policies is for indirect
losses? - ANSWER✔✔-Loss of use
Which of the following types of valuation works best for property whose value does not
fluctuate much? - ANSWER✔✔-Agreed value
Under the limits of insurance provision found in the Physical Damage Coverage Form
in a Commercial Auto policy, how much will an insurer pay to repair or replace a
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, covered auto? - ANSWER✔✔-The lesser of the actual cash value or the cost to repair or
replace a covered auto
All of the following conditions must exist for injury or damage to be included in the
products and completed operations hazard of a commercial general liability policy
EXCEPT - ANSWER✔✔-The injury or damage must occur within 90 days after the
insured's work is completed.
The type of professional liability coverage a medical doctor needs is - ANSWER✔✔-
Malpractice coverage.
How much coverage is provided under a homeowners policy for theft or unauthorized
use of a credit card? - ANSWER✔✔-$500
Burglary is defined as - ANSWER✔✔-Taking of property from within the premises
leaving visible signs of forced entry.
When an insured makes truthful statements on the application for insurance and pays
the required premium, it is known as which of the following? - ANSWER✔✔-
Consideration
Insurable interest in a property policy must be proven - ANSWER✔✔-At the time of
loss.
The part of the policy that sets forth the rules of conduct, duties, and obligations of the
parties is called the - ANSWER✔✔-Conditions
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with Correct Answers 100% Pass
The causes of loss insured against in an insurance policy are known as - ANSWER✔✔-
Perils
Before an insurer will pay any loss under a policy, what is usually required from the
insured? - ANSWER✔✔-Proof of loss
An insured works outside the home. The insured's sister lives with him and cares for
his four children. When the insured's home is severely damaged by fire, the family
moves into an apartment while repairs are being made. The largest apartment available
in the area has two bedrooms, so the insured's sister has to stay at a motel. How much
will the HO-3 form pay for these additional living expense? - ANSWER✔✔-All of the
expense up to the Coverage D limit
All of the following statements concerning coinsurance are true EXCEPT -
ANSWER✔✔-The coinsurance formula will also be applied to total losses.
What insurance policy provision defines how the policy will respond if there is more
than one insurance policy written on the same risk? - ANSWER✔✔-Other insurance
What is the purpose of the coinsurance clause found in property insurance policies? -
ANSWER✔✔-Encourage the insured to insure the property closer to its full value
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 1/17
,With respect to the business of insurance, a hazard is - ANSWER✔✔-Any condition or
exposure that increases the possibility of loss.
A building is insured, but no one has lived or worked in it for 10 years. The building is
completely empty of any furniture or personal belongings. From an insurance
standpoint, the building is considered - ANSWER✔✔-Vacant
For the reported losses of an insured group to become more likely to equal the statistical
probability of loss for that particular class, the insured group must become -
ANSWER✔✔-Larger
The businessowners policy liability coverage will pay for necessary medical expenses of
others incurred within what maximum time period? - ANSWER✔✔-1 year
An insured is driving her auto and strikes a large pothole, causing a flat tire. Which
coverage of the insured's personal auto policy will pay for the repair? - ANSWER✔✔-
This loss is not covered
Which of the following coverages in dwelling and homeowners policies is for indirect
losses? - ANSWER✔✔-Loss of use
Which of the following types of valuation works best for property whose value does not
fluctuate much? - ANSWER✔✔-Agreed value
Under the limits of insurance provision found in the Physical Damage Coverage Form
in a Commercial Auto policy, how much will an insurer pay to repair or replace a
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 2/17
, covered auto? - ANSWER✔✔-The lesser of the actual cash value or the cost to repair or
replace a covered auto
All of the following conditions must exist for injury or damage to be included in the
products and completed operations hazard of a commercial general liability policy
EXCEPT - ANSWER✔✔-The injury or damage must occur within 90 days after the
insured's work is completed.
The type of professional liability coverage a medical doctor needs is - ANSWER✔✔-
Malpractice coverage.
How much coverage is provided under a homeowners policy for theft or unauthorized
use of a credit card? - ANSWER✔✔-$500
Burglary is defined as - ANSWER✔✔-Taking of property from within the premises
leaving visible signs of forced entry.
When an insured makes truthful statements on the application for insurance and pays
the required premium, it is known as which of the following? - ANSWER✔✔-
Consideration
Insurable interest in a property policy must be proven - ANSWER✔✔-At the time of
loss.
The part of the policy that sets forth the rules of conduct, duties, and obligations of the
parties is called the - ANSWER✔✔-Conditions
Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 3/17
