AIC Exam Assignment Test 4
Which one of the following statements is correct with respect to the Recovered Property condition of
b b b b b b b b b b b b b b b
the Building and Personal Property Coverage Form (BPP)?
b b b b b b b b
Select one: b
A. The insured has the option of taking the recovered property and refunding the loss payment to the
b b b b b b b b b b b b b b b b b
insurer.
b
B. Recovered property is returned to the insured, who has no obligation to return the loss payment to
b b b b b b b b b b b b b b b b b
the insurer.
b b
C. If property is recovered, the insured must accept the recovered property and refund the loss
b b b b b b b b b b b b b b b
payment, less the cost of recovering and repairing the property, to the insurer.
b b b b b b b b b b b b b
D. When property is recovered, the insurer need not notify the insured and may dispose of the
b b b b b b b b b b b b b b b b
property as it sees fit. - ANS >> A. The insured has the option of taking the recovered property and
b b b b b b b b b b b b b b b b b b b b
refunding the loss payment to the insurer.
b b b b b b b
Which one of the following statements is correct with respect to the condition Duties in the Event of
b b b b b b b b b b b b b b b b b
Loss or Damage of the Building and Personal Property Coverage Form (BPP)?
b b b b b b b b b b b b
Select one: b
A. If the insured fails to perform any of them, the insurer may not have to pay for the loss.
b b b b b b b b b b b b b b b b b b b
B. The insured is required to give the insurer notice of the loss, including a description of the property
b b b b b b b b b b b b b b b b b b
damaged, within 24 hours.
b b b b
C. The claims adjuster is required to take all reasonable steps to protect the property from further
b b b b b b b b b b b b b b b b
loss, prepare an inventory and set the damaged property aside.
b b b b b b b b b b
D. To prevent insurance fraud, the insurer is obliged to notify the police of all losses reported. - ANS >>
b b b b b b b b b b b b b b b b b b b
A. If the insured fails to perform any of them, the insurer may not have to pay for the loss.
b b b b b b b b b b b b b b b b b b b b
The policy valuation approach that determines the basis for using new property of like kind and quality
b b b b b b b b b b b b b b b b
and adjusts for depreciation to determine the amount to be paid at the time of a loss is called
b b b b b b b b b b b b b b b b b b b
Select one: b
,A. Reporting value.
b b
B. Agreed value.
b b
C. Actual cash value.
b b b
D. Replacement cost. - ANS >> C. Actual cash value.
b b b b b b b b b
Which one of the following statements is correct with respect to the Valuation condition of the
b b b b b b b b b b b b b b b
Building and Personal Property Coverage Form (BPP)?
b b b b b b b
Select one: b
A. Stock sold but not delivered is valued at replacement cost.
b b b b b b b b b b
B. Improvements and betterments that are not replaced are covered for up to $2,500.
b b b b b b b b b b b b b
C. The valuation condition cannot be modified.
b b b b b b
D. Subject to certain exceptions, insured property is valued at its actual cash value (ACV). - ANS >> D.
b b b b b b b b b b b b b b b b b b
Subject to certain exceptions, insured property is valued at its actual cash value (ACV).
b b b b b b b b b b b b b b
An insured's office building is valued $500,000, contents valued $100,000 and leased computers valued
b b b b b b b b b b b b b
$50,000. The insured wants to be certain covered property can be repaired or replaced without any
b b b b b b b b b b b b b b b b
coinsurance or depreciation penalties in the event of physical loss or damage. Which Limits and
b b b b b b b b b b b b b b b
Optional Coverage(s) on the Building and Personal Property Coverage Form would best suit this
b b b b b b b b b b b b b b
insured's wants?
b b
Select one: b
A. Seek no Optional Coverages but make sure to provide the insurer a signed statement of values
b b b b b b b b b b b b b b b b
B. Building $500,000 with Agreed Value Optional Coverage; Contents $100,000 with Agreed Value
b b b b b b b b b b b b
Optional Coverage; Extension of Replacement Cost to Personal Property of Others $50,000
b b b b b b b b b b b b
C. Building $480,000 with Replacement Cost Optional Coverages; Contents $80,000 with Replacement
b b b b b b b b b b b
Cost and Agreed Value Optional Coverages; Extension of Replacement Cost to Personal Property of
b b b b b b b b b b b b b b
Others $40,000
b b
D. Building $500,000 wit - ANS >> D. Building $500,000 with Replacement Cost and Agreed Value
b b b b b b b b b b b b b b b
Optional Coverages; Contents $100,000 with Replacement Cost and Agreed Value Optional Coverages;
b b b b b b b b b b b b
Extension of Replacement Cost to Personal Property of Others $50,000
b b b b b b b b b b
, Which one of the following optional coverages would obligate the insurer to pay for new property of
b b b b b b b b b b b b b b b b
like kind and quality, without any deduction for depreciation?
b b b b b b b b b
Select one: b
A. Actual Cash Value
b b b
B. Replacement Cost
b b
C. Functional Replacement Cost
b b b
D. Agreed Value - ANS >> B. Replacement Cost
b b b b b b b b
A building is insured for $200,000 under an agreed value policy. The policy has a $10,000 deductible
b b b b b b b b b b b b b b b b
and the agreed value of the building is $220,000. After suffering a $43,000 loss, the insurer will pay
b b b b b b b b b b b b b b b b b b
(rounded to the nearest $10)
b b b b b
Select one: b
A. $29,090.
b
B. $33,000.
b
C. $39,090.
b
D. $43,000. - ANS >> A. $29,090.
b b b b b b
[($200,000/220,000) X 43,000] -10,000 = $29,090 b b b b b
An insured chooses the "Agreed Value" option for its Building and Personal Property Coverage Form
b b b b b b b b b b b b b b
(BPP). The agreed value for the property is $100,000 and the limit of insurance is $120,000. The
b b b b b b b b b b b b b b b b b
building is totally destroyed by a covered cause of loss. At the time of the loss, the value of the
b b b b b b b b b b b b b b b b b b b b
building was $130,000. Ignoring any deductible and rounded to the nearest $1,000, the insurer would
b b b b b b b b b b b b b b b
pay
b
Select one: b
A. $100,000.
b
B. $108,000.
b
Which one of the following statements is correct with respect to the Recovered Property condition of
b b b b b b b b b b b b b b b
the Building and Personal Property Coverage Form (BPP)?
b b b b b b b b
Select one: b
A. The insured has the option of taking the recovered property and refunding the loss payment to the
b b b b b b b b b b b b b b b b b
insurer.
b
B. Recovered property is returned to the insured, who has no obligation to return the loss payment to
b b b b b b b b b b b b b b b b b
the insurer.
b b
C. If property is recovered, the insured must accept the recovered property and refund the loss
b b b b b b b b b b b b b b b
payment, less the cost of recovering and repairing the property, to the insurer.
b b b b b b b b b b b b b
D. When property is recovered, the insurer need not notify the insured and may dispose of the
b b b b b b b b b b b b b b b b
property as it sees fit. - ANS >> A. The insured has the option of taking the recovered property and
b b b b b b b b b b b b b b b b b b b b
refunding the loss payment to the insurer.
b b b b b b b
Which one of the following statements is correct with respect to the condition Duties in the Event of
b b b b b b b b b b b b b b b b b
Loss or Damage of the Building and Personal Property Coverage Form (BPP)?
b b b b b b b b b b b b
Select one: b
A. If the insured fails to perform any of them, the insurer may not have to pay for the loss.
b b b b b b b b b b b b b b b b b b b
B. The insured is required to give the insurer notice of the loss, including a description of the property
b b b b b b b b b b b b b b b b b b
damaged, within 24 hours.
b b b b
C. The claims adjuster is required to take all reasonable steps to protect the property from further
b b b b b b b b b b b b b b b b
loss, prepare an inventory and set the damaged property aside.
b b b b b b b b b b
D. To prevent insurance fraud, the insurer is obliged to notify the police of all losses reported. - ANS >>
b b b b b b b b b b b b b b b b b b b
A. If the insured fails to perform any of them, the insurer may not have to pay for the loss.
b b b b b b b b b b b b b b b b b b b b
The policy valuation approach that determines the basis for using new property of like kind and quality
b b b b b b b b b b b b b b b b
and adjusts for depreciation to determine the amount to be paid at the time of a loss is called
b b b b b b b b b b b b b b b b b b b
Select one: b
,A. Reporting value.
b b
B. Agreed value.
b b
C. Actual cash value.
b b b
D. Replacement cost. - ANS >> C. Actual cash value.
b b b b b b b b b
Which one of the following statements is correct with respect to the Valuation condition of the
b b b b b b b b b b b b b b b
Building and Personal Property Coverage Form (BPP)?
b b b b b b b
Select one: b
A. Stock sold but not delivered is valued at replacement cost.
b b b b b b b b b b
B. Improvements and betterments that are not replaced are covered for up to $2,500.
b b b b b b b b b b b b b
C. The valuation condition cannot be modified.
b b b b b b
D. Subject to certain exceptions, insured property is valued at its actual cash value (ACV). - ANS >> D.
b b b b b b b b b b b b b b b b b b
Subject to certain exceptions, insured property is valued at its actual cash value (ACV).
b b b b b b b b b b b b b b
An insured's office building is valued $500,000, contents valued $100,000 and leased computers valued
b b b b b b b b b b b b b
$50,000. The insured wants to be certain covered property can be repaired or replaced without any
b b b b b b b b b b b b b b b b
coinsurance or depreciation penalties in the event of physical loss or damage. Which Limits and
b b b b b b b b b b b b b b b
Optional Coverage(s) on the Building and Personal Property Coverage Form would best suit this
b b b b b b b b b b b b b b
insured's wants?
b b
Select one: b
A. Seek no Optional Coverages but make sure to provide the insurer a signed statement of values
b b b b b b b b b b b b b b b b
B. Building $500,000 with Agreed Value Optional Coverage; Contents $100,000 with Agreed Value
b b b b b b b b b b b b
Optional Coverage; Extension of Replacement Cost to Personal Property of Others $50,000
b b b b b b b b b b b b
C. Building $480,000 with Replacement Cost Optional Coverages; Contents $80,000 with Replacement
b b b b b b b b b b b
Cost and Agreed Value Optional Coverages; Extension of Replacement Cost to Personal Property of
b b b b b b b b b b b b b b
Others $40,000
b b
D. Building $500,000 wit - ANS >> D. Building $500,000 with Replacement Cost and Agreed Value
b b b b b b b b b b b b b b b
Optional Coverages; Contents $100,000 with Replacement Cost and Agreed Value Optional Coverages;
b b b b b b b b b b b b
Extension of Replacement Cost to Personal Property of Others $50,000
b b b b b b b b b b
, Which one of the following optional coverages would obligate the insurer to pay for new property of
b b b b b b b b b b b b b b b b
like kind and quality, without any deduction for depreciation?
b b b b b b b b b
Select one: b
A. Actual Cash Value
b b b
B. Replacement Cost
b b
C. Functional Replacement Cost
b b b
D. Agreed Value - ANS >> B. Replacement Cost
b b b b b b b b
A building is insured for $200,000 under an agreed value policy. The policy has a $10,000 deductible
b b b b b b b b b b b b b b b b
and the agreed value of the building is $220,000. After suffering a $43,000 loss, the insurer will pay
b b b b b b b b b b b b b b b b b b
(rounded to the nearest $10)
b b b b b
Select one: b
A. $29,090.
b
B. $33,000.
b
C. $39,090.
b
D. $43,000. - ANS >> A. $29,090.
b b b b b b
[($200,000/220,000) X 43,000] -10,000 = $29,090 b b b b b
An insured chooses the "Agreed Value" option for its Building and Personal Property Coverage Form
b b b b b b b b b b b b b b
(BPP). The agreed value for the property is $100,000 and the limit of insurance is $120,000. The
b b b b b b b b b b b b b b b b b
building is totally destroyed by a covered cause of loss. At the time of the loss, the value of the
b b b b b b b b b b b b b b b b b b b b
building was $130,000. Ignoring any deductible and rounded to the nearest $1,000, the insurer would
b b b b b b b b b b b b b b b
pay
b
Select one: b
A. $100,000.
b
B. $108,000.
b
