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Pearson VUE: Property Insurance Practice
Exam Questions and Correct Answers
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 Ans: — C
The MAXIMUM amount a policy will pay in the event of a loss is
called the:
A. coinsurance amount
B. deductible
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C. limit of liability
D. pro rata return Ans: — 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 Ans: — D
Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
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C. Is limited by the named exclusions
D. Includes no exclusions Ans: — C
Which of the following businesses would be eligible for a
Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop Ans: — 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
© 2025 All rights reserved
Pearson VUE: Property Insurance Practice
Exam Questions and Correct Answers
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 Ans: — C
The MAXIMUM amount a policy will pay in the event of a loss is
called the:
A. coinsurance amount
B. deductible
© 2025 All rights reserved
, 2 | Page
C. limit of liability
D. pro rata return Ans: — 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 Ans: — D
Special Form or Open Perils coverage:
A. Provides coverage against the named perils
B. Provides coverage against scheduled risks
© 2025 All rights reserved
, 3 | Page
C. Is limited by the named exclusions
D. Includes no exclusions Ans: — C
Which of the following businesses would be eligible for a
Businessowners policy?
A. Auto body shop
B. Theater
C. Branch bank
D. Barber shop Ans: — 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
© 2025 All rights reserved
