CISR Insuring Commercial Property Exam SCRIPT
2026/2027 WITH EXPERT-VERIFIED ANSWERS
RATED A+
• Buchholz Tractor Repair purchased a new utility shed for $70,000. By the date a
loss occurs, it has depreciated by $10,000. The replacement cost today is $78,000.
What is the actual cash value of this item?
a. $60000
b. $68000
c. $70000
d. $78000 -✓✓ CORRECT ANSWER: b. $68000
• Ozark Casino has a new building with a value of $500,000. It is currently insured
for $400,000 with an 80% coinsurance clause. A fire causes a $20,000 loss to the
building. Disregarding any deductible, how much will Ozark's insurance company
pay?
a. $16000
b. $18000
c. $20000
d. $19500 -✓✓ CORRECT ANSWER: c. $20000
• When both buildings owned by the insured are covered under a single limit of
insurance, this is known as ______________.
a. Specific Insurance
b. Agreed Value
c. Scheduled Insurance
d. Blanket Insurance -✓✓ CORRECT ANSWER: d. Blanket Insurance
,• Santa's Workshop, Inc., maintains a consistent inventory of toys throughout the
year except for the months of September through December, when their inventory
values double. Which of the following is the best method of providing sufficient
insurance coverage for the four months of increased inventory values?
a. Inflation Guard option
b. Value Reporting Form
c. Higher policy limits at the inception date of the policy
d. Peak Season Endorsement -✓✓ CORRECT ANSWER: d. Peak Season
Endorsement
• If no other insurance applies, which of the following is covered under the
unendorsed Building and Personal Property Coverage Form?
a. Underground pipes, flues, or drains
b. Bridges, roadways, etc.
c. Foundations below the surface of the ground
d. Additions that are in the process of being completed -✓✓ CORRECT
ANSWER: d. Additions that are in the process of being completed
• When other conditions of the Additional Coverage - Preservation of Property
have been met, the Building and Personal Property Coverage Form pays for direct
physical damage from ____________________.
a. only the causes of loss described in the Causes of Loss form applicable to the
Building and Personal Property Coverage Form
b. any cause of loss
c. only fire, lightning, explosion, riot or civil commotion, or aircraft
d. only the causes of loss identified as "Specified Causes of Loss" -✓✓ CORRECT
ANSWER: b. any cause of loss
, • Flip Factory Fun World has a building insured for $200,000 on a replacement
cost basis and is in compliance with the coinsurance clause. The building has been
vacant for 90 days and sustains a fire loss of $100,000. Disregarding the policy
deductible, the Building and Personal Property Coverage Form prescribes which of
the following as the amount to be paid?
a. The loss is not covered.
b. $85000
c. $50000
d. $100000 -✓✓ CORRECT ANSWER: b. $85000
• The Declarations page of a Commercial Property Policy shows Peter Dragon,
Paul Guthrie, and Mary Mitchell, listed in that order, as the named insureds. The
mortgageholder is listed as the First National Bank. In the event of a non-payment
of premium, under the Common Policy Conditions of an unendorsed policy, the
insurance company is required to send notice of cancellation to:
a. Peter Dragon, Paul Guthrie, Mary Mitchell, and First National Bank
b. Peter Dragon and First National Bank
c. Peter Dragon and Paul Guthrie
d. Peter Dragon, only -✓✓ CORRECT ANSWER: b. Peter Dragon and First
National Bank
• Business Income Agreed Value, one of the Optional Coverages in the Building
and Personal Property Coverage Form ________________.
a. substitutes replacement cost for actual cash value in the method of valuation
b. guarantees the amount that will be paid to the insured in the event of a total loss
c. is added by separate endorsement
d. suspends the coinsurance clause -✓✓ CORRECT ANSWER: d. suspends the
coinsurance clause
2026/2027 WITH EXPERT-VERIFIED ANSWERS
RATED A+
• Buchholz Tractor Repair purchased a new utility shed for $70,000. By the date a
loss occurs, it has depreciated by $10,000. The replacement cost today is $78,000.
What is the actual cash value of this item?
a. $60000
b. $68000
c. $70000
d. $78000 -✓✓ CORRECT ANSWER: b. $68000
• Ozark Casino has a new building with a value of $500,000. It is currently insured
for $400,000 with an 80% coinsurance clause. A fire causes a $20,000 loss to the
building. Disregarding any deductible, how much will Ozark's insurance company
pay?
a. $16000
b. $18000
c. $20000
d. $19500 -✓✓ CORRECT ANSWER: c. $20000
• When both buildings owned by the insured are covered under a single limit of
insurance, this is known as ______________.
a. Specific Insurance
b. Agreed Value
c. Scheduled Insurance
d. Blanket Insurance -✓✓ CORRECT ANSWER: d. Blanket Insurance
,• Santa's Workshop, Inc., maintains a consistent inventory of toys throughout the
year except for the months of September through December, when their inventory
values double. Which of the following is the best method of providing sufficient
insurance coverage for the four months of increased inventory values?
a. Inflation Guard option
b. Value Reporting Form
c. Higher policy limits at the inception date of the policy
d. Peak Season Endorsement -✓✓ CORRECT ANSWER: d. Peak Season
Endorsement
• If no other insurance applies, which of the following is covered under the
unendorsed Building and Personal Property Coverage Form?
a. Underground pipes, flues, or drains
b. Bridges, roadways, etc.
c. Foundations below the surface of the ground
d. Additions that are in the process of being completed -✓✓ CORRECT
ANSWER: d. Additions that are in the process of being completed
• When other conditions of the Additional Coverage - Preservation of Property
have been met, the Building and Personal Property Coverage Form pays for direct
physical damage from ____________________.
a. only the causes of loss described in the Causes of Loss form applicable to the
Building and Personal Property Coverage Form
b. any cause of loss
c. only fire, lightning, explosion, riot or civil commotion, or aircraft
d. only the causes of loss identified as "Specified Causes of Loss" -✓✓ CORRECT
ANSWER: b. any cause of loss
, • Flip Factory Fun World has a building insured for $200,000 on a replacement
cost basis and is in compliance with the coinsurance clause. The building has been
vacant for 90 days and sustains a fire loss of $100,000. Disregarding the policy
deductible, the Building and Personal Property Coverage Form prescribes which of
the following as the amount to be paid?
a. The loss is not covered.
b. $85000
c. $50000
d. $100000 -✓✓ CORRECT ANSWER: b. $85000
• The Declarations page of a Commercial Property Policy shows Peter Dragon,
Paul Guthrie, and Mary Mitchell, listed in that order, as the named insureds. The
mortgageholder is listed as the First National Bank. In the event of a non-payment
of premium, under the Common Policy Conditions of an unendorsed policy, the
insurance company is required to send notice of cancellation to:
a. Peter Dragon, Paul Guthrie, Mary Mitchell, and First National Bank
b. Peter Dragon and First National Bank
c. Peter Dragon and Paul Guthrie
d. Peter Dragon, only -✓✓ CORRECT ANSWER: b. Peter Dragon and First
National Bank
• Business Income Agreed Value, one of the Optional Coverages in the Building
and Personal Property Coverage Form ________________.
a. substitutes replacement cost for actual cash value in the method of valuation
b. guarantees the amount that will be paid to the insured in the event of a total loss
c. is added by separate endorsement
d. suspends the coinsurance clause -✓✓ CORRECT ANSWER: d. suspends the
coinsurance clause
