ExamFX Practice Test Questions With Complete Solution

All of the following describe indirect losses EXCEPT: a. The cost of a rental car while a covered auto is in the body shop b.The cost of eating at restaurants while a fire damaged kitchen is repaired c. Replacing shingles on a roof destroyed by a covered loss d. Hotel bills while a smoke damaged home is cleaned correct answer: c. Replacing shingles on a roof destroyed by a covered loss Mr. Smith has had a kitchen fire that destroyed his two-year old electric oven. He paid $1,200 for the oven at the time of purchase. Mr. Smith has ACV Coverage on personal property with a $500 deductible. Depreciation is estimated at $100 per year. Assuming the loss is covered, select the best answer for what Mr. Smith will receive from the insurer. a. Cost new less the deductible b. Original purchase price less the deductible c. Today's replacement cost less the deductible and depreciation amount d. Replacement cost of oven correct answer: Today's replacement cost less the deductible and depreciation amount After checking prices, Mr. Smith from the prior question question discovers a new oven like his old one will cost $1,500. Using the same numbers, how much can Mr. Smith expect in payment from his insurer? a. $700 b. $1000 c. $1300 d. $800 correct answer: d. $800 Staying with Mr. Smith. had he purchased replacement cost on personal property when he originally bought his policy, how much would Mr. Smith receive? Use the info from previous questions again. a. $1000 b. $1300 c. $700 d. $800 correct answer: a. $1000 All of the following are examples of perils EXCEPT: a. Lightning b. Internal explosion