Property Insurance Exam Practice Test Questions With Complete Solutions

"The chance that a person or business entity will suffer a financial loss" defines: A.gambling B.loss exposure C.risk D.speculative risk correct answer: C "Actual physical destruction of insured property" defines A.direct loss B.indirect loss C.peril D.vandalism correct answer: A Loose tiles hanging from the ceiling are an example of a ______ hazard. A.mental B.moral C.morale D.physical correct answer: D Insurable interest in a Property Insurance policy must be demonstrated A.at time of a loss B.at time of application C.at time of first payment D.all of the above correct answer: A 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 All are incompetent to contract EXCEPT A.illegal aliens B.mentally challenged citizens C.minors D.senior citizens correct answer: D All are major cause of loss forms in Commercial Property Insurance EXCEPT A.basic B.broad C.earthquake D.special correct answer: C 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