PEARSON VUE PROPERTY INSURANCE PRACTICE EXAM
STUDY GUIDE // A+ GRADED PRESENTATION // POLICY
COVERAGE RISK MANAGEMENT CLAIMS PROCESS AND
INSURANCE REGULATIONS FOR STUDENT MASTERY //
ACADEMIC YEAR 2025/2026
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 - CORRECT ANSWER-C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
B. deductible
C. limit of liability
,D. pro rata return - CORRECT 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 - CORRECT ANSWER-D
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 - CORRECT ANSWER-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 - CORRECT 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 - CORRECT 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:
A. a time element loss
, B. a consequential loss
C. a direct loss
D. an indirect loss - CORRECT ANSWER-C
Which of the following terms is defined as the uncertainty of future
outcome?
A. Risk
B. Hazard
C. Peril
D. Cause - CORRECT ANSWER-A
The Personal Liability section of a Homeowners policy covers which of the
following options?
A. Damage to an insured's property caused by a visitor
B. Bodily injury to a resident caused by a neighbor's dog
C. Property damage caused by war
STUDY GUIDE // A+ GRADED PRESENTATION // POLICY
COVERAGE RISK MANAGEMENT CLAIMS PROCESS AND
INSURANCE REGULATIONS FOR STUDENT MASTERY //
ACADEMIC YEAR 2025/2026
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 - CORRECT ANSWER-C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
B. deductible
C. limit of liability
,D. pro rata return - CORRECT 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 - CORRECT ANSWER-D
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 - CORRECT ANSWER-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 - CORRECT 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 - CORRECT 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:
A. a time element loss
, B. a consequential loss
C. a direct loss
D. an indirect loss - CORRECT ANSWER-C
Which of the following terms is defined as the uncertainty of future
outcome?
A. Risk
B. Hazard
C. Peril
D. Cause - CORRECT ANSWER-A
The Personal Liability section of a Homeowners policy covers which of the
following options?
A. Damage to an insured's property caused by a visitor
B. Bodily injury to a resident caused by a neighbor's dog
C. Property damage caused by war
