CISR Insuring Commercial Property Exam
2026/2027 UPDATED QUESTIONS WITH
ANSWERS GRADED A+
• Types of Commercial Property -✓✓ CORRECT ANSWER: Real Property & Personal
Property
• Real property -✓✓ CORRECT ANSWER: things that are affixed or comprise a part of
the real estate
• Personal Property -✓✓ CORRECT ANSWER: All property not classified as real
property
EX: Equipment, supplies, office furniture, inventory
• Insurable Interest -✓✓ CORRECT ANSWER: a financial stake in the property
Ex: owner, mortagage/lien holder, lessee. tenant. contractual rights
• Direct Losses -✓✓ CORRECT ANSWER: actual damage to tangible property
• Indirect Losses -✓✓ CORRECT ANSWER: financial consequences of a direct loss
• Valuation of Property -✓✓ CORRECT ANSWER: how the financial value of an insured
property is determined
• Actual Cash Value -✓✓ CORRECT ANSWER: Cost of new property - Depreciation =
• Replacement Cost -✓✓ CORRECT ANSWER: does not deduct for depreciation
replace the property or item with like kind and quality at today's dollars
• Functional Replacement Cost -✓✓ CORRECT ANSWER: based upon the amount
needed to buy or rebuild a property that serves the same purpose as the original
property
• Selling Price Valuation -✓✓ CORRECT ANSWER: Property has sold but has not yet
been delivered
• Value of Tenant's Improvements and Betterments -✓✓ CORRECT ANSWER:
Improvements are considered, legally and practically, as part of the building which the
tenant does not own.
Can be valued based upon the original cost to make the improvements, but at a pro rata
value based upon the remaining time left on the lease at the time of the loss
,• Valued policy Law -✓✓ CORRECT ANSWER: a legal statute that requires insurance
companies to pay the full value of a policy to the insured in the event of a total loss.
Prevents the insurance companies from overvaluing properties to increase premiums
• Coinsurance Clause -✓✓ CORRECT ANSWER: imposes a penalty on a claim
payment if the insurance to value requirement is not met
if the limit of insurance is not equal to at least a specified percentage of the building's
value
If the insured fails to purchase a limit at or above the required percentage, then loss
payment for a partial loss is reduced by the same percentage the insured underinsured
their property
• Insured Benefits from Coinsurance requirements -✓✓ CORRECT ANSWER: 1. it
encourages the insured to adequately insure their property
2. it lowers premiums making purchasing more insurance more economical
• Carrier benefits from the coinsurance requiremnts -✓✓ CORRECT ANSWER: 1.
provides better premium levels per risk insured
2. it prevents the purchase of insurance for the payment of smaller losses only
3. Knowing the true property exposures within an insurer's portfolio allows for better rate
accuracy over time
• Coinsurance Formula -✓✓ CORRECT ANSWER: (Did/Should) X Loss = Loss payment
• Agreed Value -✓✓ CORRECT ANSWER: an upfront agreement between the insured
and the carrier on the fixed value of the property. This suspends the coinsurance cause
a Statement of Values must be provided
• statement of values -✓✓ CORRECT ANSWER: lists the insured property and values of
each item
• Types of Commercial Property Limits -✓✓ CORRECT ANSWER: Specific, Scheduled,
and Blanket Coverage Limits
• Specific Property Limits -✓✓ CORRECT ANSWER: a limit applies to a building or
personal property at a single location
• Scheduled Property Limits -✓✓ CORRECT ANSWER: separate limits of insurance
applied to individually listed properties
• Blanket Property Limits -✓✓ CORRECT ANSWER: takes the value of all reported
properties- which, in addition to the building and business personal property, may also
include personal property of others and tenant's improvements and betterments. This
total limit is available to pay losses regardless of what property or location has suffered
the loss
, • Margin Clause -✓✓ CORRECT ANSWER: A clause added to a blanket insurance
policy to limit the amount recoverable for each building or contents at each premises to
an agreed percentage of the value shown for that property on the most recent statement
of values submitted to the insurer.
• Methods for Handling Fluctuations in Vlaues -✓✓ CORRECT ANSWER: Blanket
Insurance
Peak Season Endorsement
Value Reporting Form
• Peak Season Limit of Insurance (CP 12 30 ) Endorsement -✓✓ CORRECT ANSWER:
automatically increases the limit for the insured's business personal property for a
specified period of time to ensure appropriate coverage
• Value Reporting Form ( CP 13 10) Endorsement -✓✓ CORRECT ANSWER: intended
for personal property values that fluctuate in both time and value
provides periodic reports stating the amount of actual values at hand
• Components of Common Policy Declarations -✓✓ CORRECT ANSWER: Named
Insured
Policy Period
Business Description
Coverage Parts
• Common Policy Conditions -✓✓ CORRECT ANSWER: Cancellation
Changes
Examination of Books and Records
Inspection and Surveys
Premiums
Transfer of Rights and Duties under this policy
• Rights and Responsibilities of the First Named Insured -✓✓ CORRECT ANSWER:
Cancellation is only allowed by the first named insured. The company will not recognize
any other person or organization making a cancellation request, except an estate of a
deceased insured under different rules that may vary by state
The insurance company is obligated to notify the first named insured should it decide to
cancel the policy
The first named insured receives any premium refund should the policy be cancelled
The insurance company will only accept policy change requests from the first named
insured
the first named insured is responsible for the payment of premiums due
the first named insured is the only one who receives premium refunds due to any policy
changes
2026/2027 UPDATED QUESTIONS WITH
ANSWERS GRADED A+
• Types of Commercial Property -✓✓ CORRECT ANSWER: Real Property & Personal
Property
• Real property -✓✓ CORRECT ANSWER: things that are affixed or comprise a part of
the real estate
• Personal Property -✓✓ CORRECT ANSWER: All property not classified as real
property
EX: Equipment, supplies, office furniture, inventory
• Insurable Interest -✓✓ CORRECT ANSWER: a financial stake in the property
Ex: owner, mortagage/lien holder, lessee. tenant. contractual rights
• Direct Losses -✓✓ CORRECT ANSWER: actual damage to tangible property
• Indirect Losses -✓✓ CORRECT ANSWER: financial consequences of a direct loss
• Valuation of Property -✓✓ CORRECT ANSWER: how the financial value of an insured
property is determined
• Actual Cash Value -✓✓ CORRECT ANSWER: Cost of new property - Depreciation =
• Replacement Cost -✓✓ CORRECT ANSWER: does not deduct for depreciation
replace the property or item with like kind and quality at today's dollars
• Functional Replacement Cost -✓✓ CORRECT ANSWER: based upon the amount
needed to buy or rebuild a property that serves the same purpose as the original
property
• Selling Price Valuation -✓✓ CORRECT ANSWER: Property has sold but has not yet
been delivered
• Value of Tenant's Improvements and Betterments -✓✓ CORRECT ANSWER:
Improvements are considered, legally and practically, as part of the building which the
tenant does not own.
Can be valued based upon the original cost to make the improvements, but at a pro rata
value based upon the remaining time left on the lease at the time of the loss
,• Valued policy Law -✓✓ CORRECT ANSWER: a legal statute that requires insurance
companies to pay the full value of a policy to the insured in the event of a total loss.
Prevents the insurance companies from overvaluing properties to increase premiums
• Coinsurance Clause -✓✓ CORRECT ANSWER: imposes a penalty on a claim
payment if the insurance to value requirement is not met
if the limit of insurance is not equal to at least a specified percentage of the building's
value
If the insured fails to purchase a limit at or above the required percentage, then loss
payment for a partial loss is reduced by the same percentage the insured underinsured
their property
• Insured Benefits from Coinsurance requirements -✓✓ CORRECT ANSWER: 1. it
encourages the insured to adequately insure their property
2. it lowers premiums making purchasing more insurance more economical
• Carrier benefits from the coinsurance requiremnts -✓✓ CORRECT ANSWER: 1.
provides better premium levels per risk insured
2. it prevents the purchase of insurance for the payment of smaller losses only
3. Knowing the true property exposures within an insurer's portfolio allows for better rate
accuracy over time
• Coinsurance Formula -✓✓ CORRECT ANSWER: (Did/Should) X Loss = Loss payment
• Agreed Value -✓✓ CORRECT ANSWER: an upfront agreement between the insured
and the carrier on the fixed value of the property. This suspends the coinsurance cause
a Statement of Values must be provided
• statement of values -✓✓ CORRECT ANSWER: lists the insured property and values of
each item
• Types of Commercial Property Limits -✓✓ CORRECT ANSWER: Specific, Scheduled,
and Blanket Coverage Limits
• Specific Property Limits -✓✓ CORRECT ANSWER: a limit applies to a building or
personal property at a single location
• Scheduled Property Limits -✓✓ CORRECT ANSWER: separate limits of insurance
applied to individually listed properties
• Blanket Property Limits -✓✓ CORRECT ANSWER: takes the value of all reported
properties- which, in addition to the building and business personal property, may also
include personal property of others and tenant's improvements and betterments. This
total limit is available to pay losses regardless of what property or location has suffered
the loss
, • Margin Clause -✓✓ CORRECT ANSWER: A clause added to a blanket insurance
policy to limit the amount recoverable for each building or contents at each premises to
an agreed percentage of the value shown for that property on the most recent statement
of values submitted to the insurer.
• Methods for Handling Fluctuations in Vlaues -✓✓ CORRECT ANSWER: Blanket
Insurance
Peak Season Endorsement
Value Reporting Form
• Peak Season Limit of Insurance (CP 12 30 ) Endorsement -✓✓ CORRECT ANSWER:
automatically increases the limit for the insured's business personal property for a
specified period of time to ensure appropriate coverage
• Value Reporting Form ( CP 13 10) Endorsement -✓✓ CORRECT ANSWER: intended
for personal property values that fluctuate in both time and value
provides periodic reports stating the amount of actual values at hand
• Components of Common Policy Declarations -✓✓ CORRECT ANSWER: Named
Insured
Policy Period
Business Description
Coverage Parts
• Common Policy Conditions -✓✓ CORRECT ANSWER: Cancellation
Changes
Examination of Books and Records
Inspection and Surveys
Premiums
Transfer of Rights and Duties under this policy
• Rights and Responsibilities of the First Named Insured -✓✓ CORRECT ANSWER:
Cancellation is only allowed by the first named insured. The company will not recognize
any other person or organization making a cancellation request, except an estate of a
deceased insured under different rules that may vary by state
The insurance company is obligated to notify the first named insured should it decide to
cancel the policy
The first named insured receives any premium refund should the policy be cancelled
The insurance company will only accept policy change requests from the first named
insured
the first named insured is responsible for the payment of premiums due
the first named insured is the only one who receives premium refunds due to any policy
changes
