AINS 103 COMPREHENSIVE EXAM UPDATED QUESTIONS
AND ANSWERS GUARANTEE A+
✔✔Sally is a commercial property claims adjuster. When she is first assigned a claim,
she reviews the commercial property part of the policy to make sure that the property
that suffered the loss matches the description of the property insured. She also reviews
the kinds and amount of coverage provided. Which one of the following components of
the commercial property part will provide Sally with this information?
Select one:
A. Commercial property declarations page
B. Building and personal property coverage form
C. Causes of loss form
D. Commercial property conditions - ✔✔A. Commercial property declarations page
✔✔Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form?
Select one:
A. Damage due to explosion.
B. Damage due to vehicles
C. Damage due to vandalism
D. Damage due to weight of snow - ✔✔D. Damage due to weight of snow
✔✔The commercial property policy Causes of Loss Form that provides coverage for
"risks of direct physical loss," unless excluded or limited by the policy is called the
Select one:
A. Causes of Loss—Special Form.
B. Causes of Loss—All Risks Form.
C. Causes of Loss—Basic Form.
D. Causes of Loss—Broad Form. - ✔✔A. Causes of Loss—Special Form.
✔✔Which one of the following statements is correct with regard to the Building and
Personal Property Coverage Form (BPP)?
Select one:
A. Insureds cannot obtain any coverage under the BPP or its optional coverages for
leased photocopiers, computers, phone systems, and other equipment.
B. Insureds who have selected the replacement cost option may also elect to have the
personal property of others valued at replacement cost.
C. Under the extension of replacement cost to personal property of others, the amount
of a loss is calculated according to a formula included in the additional coverage
wording.
D. If an insured extends replacement cost to the personal property of others, the
amount of a loss is calculated as the replacement cost of that property, even if that
amount exceeds the applicable limit of insurance. - ✔✔B. Insureds who have selected
the replacement cost option may also elect to have the personal property of others
valued at replacement cost.
,✔✔When Sylvester Properties suffered a $500,000 loss of business income, it filed a
claim under the Business Income (and Extra Expense) Coverage Form (BIC) of its
commercial package policy. In order for the loss to be covered, the loss of business
income must be due to a necessary suspension in operations caused by a direct
physical loss or damage to property at the premises for which BIC is shown in the policy
declarations. Which one of the following is also part of the criteria for the loss to be
covered?
Select one:
A. The loss or damage must be caused by a covered cause of loss.
B. The suspension of operations must be less than a year.
C. The insured must continue operations at a new location.
D. The suspension of operations must be greater than 60 days. - ✔✔A. The loss or
damage must be caused by a covered cause of loss.
✔✔Which one of the following would be considered an extra expense under the
Business Income (and Extra Expense) Coverage Form of the commercial package
policy?
Select one:
A. The increased cost of construction to meet new building codes or ordinances
B. The salary of key employees who will continue to work at a temporary location
C. The cost to remove damaged equipment and machinery
D. The increased cost of rent at a temporary location - ✔✔D. The increased cost of rent
at a temporary location
✔✔The coinsurance basis for business income coverage is
Select one:
A. Net income plus continuing operating expenses.
B. Net income plus all operating expenses that would have been incurred in the
absence of a loss.
C. Gross income plus payroll and utilities.
D. Gross income less continuing operating expenses. - ✔✔B. Net income plus all
operating expenses that would have been incurred in the absence of a loss.
✔✔The commercial property coverage part of a commercial package policy contains
one or more commercial property coverage forms. Each coverage form typically
includes all of the following, EXCEPT:
Select one:
A. A range of covered peril
B. What property is covered and property that is not covered
C. An insuring agreement
D. Definitions and provisions - ✔✔A. A range of covered peril
✔✔Which one of the following is a covered cause of loss under the Causes of Loss—
Basic Form?
,Select one:
A. Weight of ice, snow, or sleet
B. Falling objects
C. Water damage
D. Sprinkler leakage - ✔✔D. Sprinkler leakage
✔✔Which one of the following is one of the covered causes of loss in the commercial
property policy Causes of Loss—Basic form?
Select one:
A. Vandalism
B. Falling objects
C. Water damage
D. Weight of ice - ✔✔A. Vandalism
✔✔Which one of the following is correct with respect to the Increased Cost of
Construction additional coverage of the Building and Personal Property Coverage Form
(BPP)?
Select one:
A. The amount of insurance is equal to 25 percent of the amount of insurance on the
building or $50,000, whichever is less.
B. It provides a small amount of insurance to cover the increased cost to comply with
ordinances or laws regulating the repair, rebuilding, or replacement of covered
buildings.
C. It includes coverage for the cost to demolish the undamaged portion of the structure
and remove its debris.
D. It does not apply if the replacement cost option has been selected. - ✔✔B. It provides
a small amount of insurance to cover the increased cost to comply with ordinances or
laws regulating the repair, rebuilding, or replacement of covered buildings.
✔✔Dooley's Restaurant is insured under a commercial package policy (CPP) with the
Business Income (with Extra Expense) Coverage Form. The business suffered a
$400,000 loss of business income when it was forced to suspend operations after flood
waters damaged the basement and first floor of the restaurant. Which one of the
following is an acceptable reason for the CPP insurer to deny the business income
claim?
Select one:
A. The building was damaged, but not completely destroyed.
B. The business planned to resume operations within 120 days.
C. The business did not earn a profit in the prior 12-month period.
D. The policy's covered causes of loss did not include flood. - ✔✔D. The policy's
covered causes of loss did not include flood.
✔✔Lucy's Bakery is insured under a commercial package policy with the Business
Income (and Extra Expense) Coverage Form. A fire loss caused significant damage to
the building. When Lucy learned that it would take 9 months to repair the building, she
, decided to temporarily relocate to a nearby rental location. All of the following would be
considered covered extra expenses under the Business Income (and Extra Expense)
Coverage Form, EXCEPT:
Select one:
A. The cost to lease mixers and other machinery
B. The salary of the assistant baker and cake decorator
C. The costs to move some of the ovens to the new location
D. The rent for the new location - ✔✔B. The salary of the assistant baker and cake
decorator
✔✔Which one of the following statements is true regarding the Business Income
(without Extra Expense) Coverage Form?
Select one:
A. It covers only extra expenses that reduce the business income loss.
B. It does not cover any extra expenses.
C. It covers only extra expenses incurred within 48 hours of the loss.
D. It covers extra expenses only for businesses that must continue their operations as
any cost. - ✔✔A. It covers only extra expenses that reduce the business income loss.
✔✔Classic Cashmere Shop (CCS) is insured by a commercial package policy. The
Business Income (and Extra Expense) Coverage Form (BIC) has a $900,000 limit of
insurance and an 80 percent coinsurance provision. CCS experienced a fire loss which
resulted in a $300,000 loss of business income. How much will the insurer pay for this
BIC loss if the coinsurance basis at the time of the loss was $1,500,000?
Select one:
A. $160,000
B. $225,000
C. $240,000
D. $300,000 - ✔✔B. $225,000
✔✔NH Manufacturing insures its building and personal property under the commercial
property coverage part of a commercial package policy (CPP). During a blizzard, a
portion of the building's roof collapsed from the weight of snow. The risk manager pulled
out the CPP to make sure that the building was covered for this type of loss. Which one
of the following components of the commercial property coverage part would provide
the risk manager with information on the covered perils?
Select one:
A. Commercial property declarations
B. Building and personal property coverage form
C. Commercial property conditions
D. Causes of loss form - ✔✔D. Causes of loss form
✔✔Which one of the following statements best describes the Causes of Loss—Special
Form?
Select one:
AND ANSWERS GUARANTEE A+
✔✔Sally is a commercial property claims adjuster. When she is first assigned a claim,
she reviews the commercial property part of the policy to make sure that the property
that suffered the loss matches the description of the property insured. She also reviews
the kinds and amount of coverage provided. Which one of the following components of
the commercial property part will provide Sally with this information?
Select one:
A. Commercial property declarations page
B. Building and personal property coverage form
C. Causes of loss form
D. Commercial property conditions - ✔✔A. Commercial property declarations page
✔✔Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form?
Select one:
A. Damage due to explosion.
B. Damage due to vehicles
C. Damage due to vandalism
D. Damage due to weight of snow - ✔✔D. Damage due to weight of snow
✔✔The commercial property policy Causes of Loss Form that provides coverage for
"risks of direct physical loss," unless excluded or limited by the policy is called the
Select one:
A. Causes of Loss—Special Form.
B. Causes of Loss—All Risks Form.
C. Causes of Loss—Basic Form.
D. Causes of Loss—Broad Form. - ✔✔A. Causes of Loss—Special Form.
✔✔Which one of the following statements is correct with regard to the Building and
Personal Property Coverage Form (BPP)?
Select one:
A. Insureds cannot obtain any coverage under the BPP or its optional coverages for
leased photocopiers, computers, phone systems, and other equipment.
B. Insureds who have selected the replacement cost option may also elect to have the
personal property of others valued at replacement cost.
C. Under the extension of replacement cost to personal property of others, the amount
of a loss is calculated according to a formula included in the additional coverage
wording.
D. If an insured extends replacement cost to the personal property of others, the
amount of a loss is calculated as the replacement cost of that property, even if that
amount exceeds the applicable limit of insurance. - ✔✔B. Insureds who have selected
the replacement cost option may also elect to have the personal property of others
valued at replacement cost.
,✔✔When Sylvester Properties suffered a $500,000 loss of business income, it filed a
claim under the Business Income (and Extra Expense) Coverage Form (BIC) of its
commercial package policy. In order for the loss to be covered, the loss of business
income must be due to a necessary suspension in operations caused by a direct
physical loss or damage to property at the premises for which BIC is shown in the policy
declarations. Which one of the following is also part of the criteria for the loss to be
covered?
Select one:
A. The loss or damage must be caused by a covered cause of loss.
B. The suspension of operations must be less than a year.
C. The insured must continue operations at a new location.
D. The suspension of operations must be greater than 60 days. - ✔✔A. The loss or
damage must be caused by a covered cause of loss.
✔✔Which one of the following would be considered an extra expense under the
Business Income (and Extra Expense) Coverage Form of the commercial package
policy?
Select one:
A. The increased cost of construction to meet new building codes or ordinances
B. The salary of key employees who will continue to work at a temporary location
C. The cost to remove damaged equipment and machinery
D. The increased cost of rent at a temporary location - ✔✔D. The increased cost of rent
at a temporary location
✔✔The coinsurance basis for business income coverage is
Select one:
A. Net income plus continuing operating expenses.
B. Net income plus all operating expenses that would have been incurred in the
absence of a loss.
C. Gross income plus payroll and utilities.
D. Gross income less continuing operating expenses. - ✔✔B. Net income plus all
operating expenses that would have been incurred in the absence of a loss.
✔✔The commercial property coverage part of a commercial package policy contains
one or more commercial property coverage forms. Each coverage form typically
includes all of the following, EXCEPT:
Select one:
A. A range of covered peril
B. What property is covered and property that is not covered
C. An insuring agreement
D. Definitions and provisions - ✔✔A. A range of covered peril
✔✔Which one of the following is a covered cause of loss under the Causes of Loss—
Basic Form?
,Select one:
A. Weight of ice, snow, or sleet
B. Falling objects
C. Water damage
D. Sprinkler leakage - ✔✔D. Sprinkler leakage
✔✔Which one of the following is one of the covered causes of loss in the commercial
property policy Causes of Loss—Basic form?
Select one:
A. Vandalism
B. Falling objects
C. Water damage
D. Weight of ice - ✔✔A. Vandalism
✔✔Which one of the following is correct with respect to the Increased Cost of
Construction additional coverage of the Building and Personal Property Coverage Form
(BPP)?
Select one:
A. The amount of insurance is equal to 25 percent of the amount of insurance on the
building or $50,000, whichever is less.
B. It provides a small amount of insurance to cover the increased cost to comply with
ordinances or laws regulating the repair, rebuilding, or replacement of covered
buildings.
C. It includes coverage for the cost to demolish the undamaged portion of the structure
and remove its debris.
D. It does not apply if the replacement cost option has been selected. - ✔✔B. It provides
a small amount of insurance to cover the increased cost to comply with ordinances or
laws regulating the repair, rebuilding, or replacement of covered buildings.
✔✔Dooley's Restaurant is insured under a commercial package policy (CPP) with the
Business Income (with Extra Expense) Coverage Form. The business suffered a
$400,000 loss of business income when it was forced to suspend operations after flood
waters damaged the basement and first floor of the restaurant. Which one of the
following is an acceptable reason for the CPP insurer to deny the business income
claim?
Select one:
A. The building was damaged, but not completely destroyed.
B. The business planned to resume operations within 120 days.
C. The business did not earn a profit in the prior 12-month period.
D. The policy's covered causes of loss did not include flood. - ✔✔D. The policy's
covered causes of loss did not include flood.
✔✔Lucy's Bakery is insured under a commercial package policy with the Business
Income (and Extra Expense) Coverage Form. A fire loss caused significant damage to
the building. When Lucy learned that it would take 9 months to repair the building, she
, decided to temporarily relocate to a nearby rental location. All of the following would be
considered covered extra expenses under the Business Income (and Extra Expense)
Coverage Form, EXCEPT:
Select one:
A. The cost to lease mixers and other machinery
B. The salary of the assistant baker and cake decorator
C. The costs to move some of the ovens to the new location
D. The rent for the new location - ✔✔B. The salary of the assistant baker and cake
decorator
✔✔Which one of the following statements is true regarding the Business Income
(without Extra Expense) Coverage Form?
Select one:
A. It covers only extra expenses that reduce the business income loss.
B. It does not cover any extra expenses.
C. It covers only extra expenses incurred within 48 hours of the loss.
D. It covers extra expenses only for businesses that must continue their operations as
any cost. - ✔✔A. It covers only extra expenses that reduce the business income loss.
✔✔Classic Cashmere Shop (CCS) is insured by a commercial package policy. The
Business Income (and Extra Expense) Coverage Form (BIC) has a $900,000 limit of
insurance and an 80 percent coinsurance provision. CCS experienced a fire loss which
resulted in a $300,000 loss of business income. How much will the insurer pay for this
BIC loss if the coinsurance basis at the time of the loss was $1,500,000?
Select one:
A. $160,000
B. $225,000
C. $240,000
D. $300,000 - ✔✔B. $225,000
✔✔NH Manufacturing insures its building and personal property under the commercial
property coverage part of a commercial package policy (CPP). During a blizzard, a
portion of the building's roof collapsed from the weight of snow. The risk manager pulled
out the CPP to make sure that the building was covered for this type of loss. Which one
of the following components of the commercial property coverage part would provide
the risk manager with information on the covered perils?
Select one:
A. Commercial property declarations
B. Building and personal property coverage form
C. Commercial property conditions
D. Causes of loss form - ✔✔D. Causes of loss form
✔✔Which one of the following statements best describes the Causes of Loss—Special
Form?
Select one:
