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PEARSON VUE: PROPERTY INSURANCE PRACTICE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
S is purchasing a Commercial Property policy to cover a
commercial building with a replacement cost of $100,000. The
policy includes an 80 percent Coinsurance clause. To avoid a
coinsurance penalty in the event of a partial loss, S should
purchase a policy with minimum limits of AT LEAST which of the
following amounts?
A. $100,000
B. $90,000
C. $80,000
D. $20,000 - ANSWER C
The MAXIMUM amount a policy will pay in the event of a loss is
called the:
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A. coinsurance amount
B. deductible
C. limit of liability
D. pro rata return - ANSWER C
The National Flood Insurance Program provides coverage for
losses caused by all of the following occurrences EXCEPT:
A. mudslides
B. runoff from heavy rain
C. overflow of tidal waters
D. water-main breakage - ANSWER D
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Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
C. Is limited by the named exclusions
D. Includes no exclusions - ANSWER C
Which of the following businesses would be eligible for a
Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
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D. Barber shop - ANSWER D
During a tornado, a barn is destroyed when a section of its wall
is blown down, knocking over a lantern, which sets the barn on
fire. The proximate cause of loss is the:
A. fire
B. collapse of the wall
C. tornado
D. smoke - ANSWER C
A fire in an insured's restaurant burns the kitchen walls and
causes smoke damage to the entire interior. Water used to
extinguish the fire causes extensive damage to floors and
furnishings. The water damage is best described as:
PEARSON VUE: PROPERTY INSURANCE PRACTICE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
S is purchasing a Commercial Property policy to cover a
commercial building with a replacement cost of $100,000. The
policy includes an 80 percent Coinsurance clause. To avoid a
coinsurance penalty in the event of a partial loss, S should
purchase a policy with minimum limits of AT LEAST which of the
following amounts?
A. $100,000
B. $90,000
C. $80,000
D. $20,000 - ANSWER C
The MAXIMUM amount a policy will pay in the event of a loss is
called the:
,2|Page
A. coinsurance amount
B. deductible
C. limit of liability
D. pro rata return - ANSWER C
The National Flood Insurance Program provides coverage for
losses caused by all of the following occurrences EXCEPT:
A. mudslides
B. runoff from heavy rain
C. overflow of tidal waters
D. water-main breakage - ANSWER D
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Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
C. Is limited by the named exclusions
D. Includes no exclusions - ANSWER C
Which of the following businesses would be eligible for a
Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
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D. Barber shop - ANSWER D
During a tornado, a barn is destroyed when a section of its wall
is blown down, knocking over a lantern, which sets the barn on
fire. The proximate cause of loss is the:
A. fire
B. collapse of the wall
C. tornado
D. smoke - ANSWER C
A fire in an insured's restaurant burns the kitchen walls and
causes smoke damage to the entire interior. Water used to
extinguish the fire causes extensive damage to floors and
furnishings. The water damage is best described as:
