AINS23 practice
Which one of the following lists the covered causes of loss (basic, broad, or special); the deductible
amount; and any optional coverages?
Select one:
A. Causes of loss forms
B. Commercial property declarations
C. Commercial property conditions
D. Commercial property coverage forms - Answer-B. Commercial property declarations
Ace Accounting has a Building and Personal Property Coverage Form (BPP) through Delta Insurance with
a limit of $300,000 on business personal property. The insured's computer system is valued at $150,000
and it is insured for $100,000 under a separate electronic data processing (EDP) equipment policy issued
by Omicron Insurance. The computer system is totally destroyed by fire, a cause of loss insured under
both policies. Which one of the following correctly describes how the loss would be settled?
Select one:
A. Because Omicron and Delta both cover the equipment, each insurer would pay half of the loss, or
$75,000.
B. The BPP policy is primary and would pay the full amount of the loss because it is within the BPP policy
limits.
,C. Because Omicron's policy more specifically describes the computer system, it must pay its limit before
Delta pays anything; Delta would pay the remaining $50,000.
D. The BPP specifically e - Answer-C. Because Omicron's policy more specifically describes the computer
system, it must pay its limit before Delta pays anything; Delta would pay the remaining $50,000.
Under the Building and Personal Property Coverage Form (BPP), which one of the following extensions
covers loss only by fire, lightning, explosion, riot or civil commotion, and aircraft?
Select one:
A. Newly Acquired or Constructed Property
B. Property Off-Premises
C. Outdoor Property
D. Personal Effects and Property of Others - Answer-C. Outdoor Property
Which one of the following losses would be considered covered water damage under the commercial
property policy Causes of Loss—Broad Form?
Select one:
A. Flooding
B. Sudden and accidental discharge of water from the breaking apart of an insured's water pipe
C. Continued or repeated leakage or seepage of water that occurs over 14 days or more
D. Surface water - Answer-B. Sudden and accidental discharge of water from the breaking apart of an
insured's water pipe
Which one of the following statements is correct with regard to the Causes of Loss—Broad Form?
Select one:
A. The form specifically excludes the cost of tearing out and replacing any part of an insured building to
repair damage to any appliance or system that leaked water or steam.
B. The water damage cause of loss includes coverage for damage due to discharge or leakage from roof
drains, gutters, downspouts, or similar fixtures or equipment
,C. The falling objects cause of loss provides coverage for falling objects that damage personal property
in the open.
D. The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the
open. - Answer-D. The weight of snow, ice, or sleet cause of loss does not cover damage to personal
property in the open.
The Causes of Loss—Special Form states that it covers "risks of direct physical loss." The loss or damage
Select one:
A. Only has to be unforeseen by the insured in order to be covered.
B. Must be unforeseen and accidental from the insured's perspective in order to be covered.
C. May be intentional and foreseen by the insured and still be covered.
D. Only has to be accidental to be covered. - Answer-B. Must be unforeseen and accidental from the
insured's perspective in order to be covered.
Jim's Barber Shop has a Building and Personal Property Coverage Form (BPP) with a $100,000 limit on
the building and a $1,000 deductible. The building suffers a $15,000 fire loss. Which one of the following
amounts will Jim's insurer pay?
Select one:
A. $ 1,000
B. $10,000
C. $14,000
D. $15,000 - Answer-C. $14,000
Which one of the following is correct with respect to the Vacancy condition of the Building and Personal
Property Coverage Form (BPP)?
Select one:
A. The conditions under which a building is considered to be vacant are different for a tenant than for an
owner.
, B. If the building has been vacant for more than ten consecutive days, the insurer will pay only for loss
caused by vandalism.
C. If the building has been vacant for more than one year, loss payments for all covered causes of loss
are reduced by 50 percent.
D. Buildings under construction or renovation are considered to be vacant. - Answer-A. The conditions
under which a building is considered to be vacant are different for a tenant than for an owner.
An insured's office building is valued $500,000, contents valued $100,000 and leased computers valued
$50,000. The insured wants to be certain covered property can be repaired or replaced without any
coinsurance or depreciation penalties in the event of physical loss or damage. Which Limits and Optional
Coverage(s) on the Building and Personal Property Coverage Form would best suit this insured's wants?
Select one:
A. Building $500,000 with Agreed Value Optional Coverage; Contents $100,000 with Agreed Value
Optional Coverage; Extension of Replacement Cost to Personal Property of Others $50,000
B. Seek no Optional Coverages but make sure to provide the insurer a signed statement of values
C. Building $500,000 with Replacement Cost and Agreed Value Optional Coverages; Contents $100,000
with Replacement Cost and Agreed Value Optional Coverages; Extension of Replacement Cost to
Personal Property of Others $50,000
D. Buil - Answer-C. Building $500,000 with Replacement Cost and Agreed Value Optional Coverages;
Contents $100,000 with Replacement Cost and Agreed Value Optional Coverages; Extension of
Replacement Cost to Personal Property of Others $50,000
Which one of the following statements is correct with respect to the Control of Property condition of the
Commercial Property Conditions Form?
Select one:
A. It requires the insured to give the insurer access to the premises in order to make inspections and to
review the insured's accounting and other records.
B. It states that a violation of a policy condition at one location will suspend coverage at all locations.
C. It prohibits the insured from abandoning damaged property to the insurer.
D. It states that coverage under the policy will not be affected by acts or omissions of persons other than
the insured, if the others are not acting under the direction or control of the insured. - Answer-D. It
Which one of the following lists the covered causes of loss (basic, broad, or special); the deductible
amount; and any optional coverages?
Select one:
A. Causes of loss forms
B. Commercial property declarations
C. Commercial property conditions
D. Commercial property coverage forms - Answer-B. Commercial property declarations
Ace Accounting has a Building and Personal Property Coverage Form (BPP) through Delta Insurance with
a limit of $300,000 on business personal property. The insured's computer system is valued at $150,000
and it is insured for $100,000 under a separate electronic data processing (EDP) equipment policy issued
by Omicron Insurance. The computer system is totally destroyed by fire, a cause of loss insured under
both policies. Which one of the following correctly describes how the loss would be settled?
Select one:
A. Because Omicron and Delta both cover the equipment, each insurer would pay half of the loss, or
$75,000.
B. The BPP policy is primary and would pay the full amount of the loss because it is within the BPP policy
limits.
,C. Because Omicron's policy more specifically describes the computer system, it must pay its limit before
Delta pays anything; Delta would pay the remaining $50,000.
D. The BPP specifically e - Answer-C. Because Omicron's policy more specifically describes the computer
system, it must pay its limit before Delta pays anything; Delta would pay the remaining $50,000.
Under the Building and Personal Property Coverage Form (BPP), which one of the following extensions
covers loss only by fire, lightning, explosion, riot or civil commotion, and aircraft?
Select one:
A. Newly Acquired or Constructed Property
B. Property Off-Premises
C. Outdoor Property
D. Personal Effects and Property of Others - Answer-C. Outdoor Property
Which one of the following losses would be considered covered water damage under the commercial
property policy Causes of Loss—Broad Form?
Select one:
A. Flooding
B. Sudden and accidental discharge of water from the breaking apart of an insured's water pipe
C. Continued or repeated leakage or seepage of water that occurs over 14 days or more
D. Surface water - Answer-B. Sudden and accidental discharge of water from the breaking apart of an
insured's water pipe
Which one of the following statements is correct with regard to the Causes of Loss—Broad Form?
Select one:
A. The form specifically excludes the cost of tearing out and replacing any part of an insured building to
repair damage to any appliance or system that leaked water or steam.
B. The water damage cause of loss includes coverage for damage due to discharge or leakage from roof
drains, gutters, downspouts, or similar fixtures or equipment
,C. The falling objects cause of loss provides coverage for falling objects that damage personal property
in the open.
D. The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the
open. - Answer-D. The weight of snow, ice, or sleet cause of loss does not cover damage to personal
property in the open.
The Causes of Loss—Special Form states that it covers "risks of direct physical loss." The loss or damage
Select one:
A. Only has to be unforeseen by the insured in order to be covered.
B. Must be unforeseen and accidental from the insured's perspective in order to be covered.
C. May be intentional and foreseen by the insured and still be covered.
D. Only has to be accidental to be covered. - Answer-B. Must be unforeseen and accidental from the
insured's perspective in order to be covered.
Jim's Barber Shop has a Building and Personal Property Coverage Form (BPP) with a $100,000 limit on
the building and a $1,000 deductible. The building suffers a $15,000 fire loss. Which one of the following
amounts will Jim's insurer pay?
Select one:
A. $ 1,000
B. $10,000
C. $14,000
D. $15,000 - Answer-C. $14,000
Which one of the following is correct with respect to the Vacancy condition of the Building and Personal
Property Coverage Form (BPP)?
Select one:
A. The conditions under which a building is considered to be vacant are different for a tenant than for an
owner.
, B. If the building has been vacant for more than ten consecutive days, the insurer will pay only for loss
caused by vandalism.
C. If the building has been vacant for more than one year, loss payments for all covered causes of loss
are reduced by 50 percent.
D. Buildings under construction or renovation are considered to be vacant. - Answer-A. The conditions
under which a building is considered to be vacant are different for a tenant than for an owner.
An insured's office building is valued $500,000, contents valued $100,000 and leased computers valued
$50,000. The insured wants to be certain covered property can be repaired or replaced without any
coinsurance or depreciation penalties in the event of physical loss or damage. Which Limits and Optional
Coverage(s) on the Building and Personal Property Coverage Form would best suit this insured's wants?
Select one:
A. Building $500,000 with Agreed Value Optional Coverage; Contents $100,000 with Agreed Value
Optional Coverage; Extension of Replacement Cost to Personal Property of Others $50,000
B. Seek no Optional Coverages but make sure to provide the insurer a signed statement of values
C. Building $500,000 with Replacement Cost and Agreed Value Optional Coverages; Contents $100,000
with Replacement Cost and Agreed Value Optional Coverages; Extension of Replacement Cost to
Personal Property of Others $50,000
D. Buil - Answer-C. Building $500,000 with Replacement Cost and Agreed Value Optional Coverages;
Contents $100,000 with Replacement Cost and Agreed Value Optional Coverages; Extension of
Replacement Cost to Personal Property of Others $50,000
Which one of the following statements is correct with respect to the Control of Property condition of the
Commercial Property Conditions Form?
Select one:
A. It requires the insured to give the insurer access to the premises in order to make inspections and to
review the insured's accounting and other records.
B. It states that a violation of a policy condition at one location will suspend coverage at all locations.
C. It prohibits the insured from abandoning damaged property to the insurer.
D. It states that coverage under the policy will not be affected by acts or omissions of persons other than
the insured, if the others are not acting under the direction or control of the insured. - Answer-D. It
