Property Exam Questions
1. An ocean marine loss that occurs through the voluntary sacrifice of a partof the vessel or
cargo to save the ship, crew, or other cargo is known as?
A: Particular average
B: Inchmaree clause
C: Protection and indemnity
D: General average: D
2. If a claim under a commercial property policy is disputed, what is the maximum time
period an insured may bring legal action against an insurer?
A: 2 years from a loss
B: 6 years From a Loss
C: 5 years from the initial application
D: 10 years from the initial application: C
3. A company has a business owners policy on a building with an estimatedreplacement cost
of $300,000. The company carries $150,000 of insurance. Ifa loss occurs, how much will the
insured company be paid?
A: Up to $300,000 for the loss
B: Up to $150,000 for the loss
C: The coinsurance formula would apply
D: Nothing because the company failed to carry the required insuranceamount: C
4. The law of large numbers is best defined as a large numbers of people withsimilar
exposures to loss resulting in actual losses being?
A: Less predictable
B: Smaller
C: Larger
,D: More Predictable: D
5. The basic dwelling (DP-1) provides all of the following coverages withoutendorsement
EXCEPT?
A: Additional Living Expenses
B: Fair Rental Value
C: Dwelling
D: Other structures: A
6. Which of the following dwelling policies insures a structure on an actualcash value basis?
A: DP-1
B: DP-2
C: DP-3
D: DP-6: A
7. All of the following are characteristics of the dwelling policy EXECPT?
A: Coverage includes the dwelling only, contents only, or both
B: Incidental occupancy of limited service-type exposure is permitted
C: Dwellings up to four family units are eligible
D: The dwelling must be owner-occupied: D
8. A building contractor constructs a rental property home using
"straw-blue" construction that does not conform to standard building codes.The contractor,
who is also the owner, does not want insurance on the buildingbut wants coverage on as many
other things as he can get. What coverage plan should be a producer recommend?
A: HO-2
B: HO-4
C: HO-5
, D: Coverage cannot be extended on this structure: D
9. What organization is responsible for administering the plan that ensuresaccess to property
insurance for beach properties?
A: Division of Insurance
B: Post-Assessment Guaranty Association
C: North Carolina Insurance Underwriting AssociationD: FAIR Plan: C
10. Which type of losses are covered by the standard policy?
A: Indirect LossesB: Direct Losses C: Both
D: Neither: B
11. If a licensee is convicted in any court for any offense, other than a traffic violation, the
licensee must notify the Commissioner within how many daysof the conviction date?
A: 10 days
B: 30 days
C: 20 days D: 15 days: A
12. Which of the following commercial property causes of loss forms explicitlycovers damages
from falling objects?
A: General FormB: Basic form
C: Broad form
D: Special Form: C
13. In order for a dwelling to be covered on a replacement cost basis, thedwelling must be
insured up to at least?
A: 20% of the replacement cost B: 40% of the replacement cost C: 60% of the replacement
cost D: 80% of the replacement cost: D
14. The main difference between an HO-4 and HO-6 is?
A: HO-6 does not cover additional living expenses
1. An ocean marine loss that occurs through the voluntary sacrifice of a partof the vessel or
cargo to save the ship, crew, or other cargo is known as?
A: Particular average
B: Inchmaree clause
C: Protection and indemnity
D: General average: D
2. If a claim under a commercial property policy is disputed, what is the maximum time
period an insured may bring legal action against an insurer?
A: 2 years from a loss
B: 6 years From a Loss
C: 5 years from the initial application
D: 10 years from the initial application: C
3. A company has a business owners policy on a building with an estimatedreplacement cost
of $300,000. The company carries $150,000 of insurance. Ifa loss occurs, how much will the
insured company be paid?
A: Up to $300,000 for the loss
B: Up to $150,000 for the loss
C: The coinsurance formula would apply
D: Nothing because the company failed to carry the required insuranceamount: C
4. The law of large numbers is best defined as a large numbers of people withsimilar
exposures to loss resulting in actual losses being?
A: Less predictable
B: Smaller
C: Larger
,D: More Predictable: D
5. The basic dwelling (DP-1) provides all of the following coverages withoutendorsement
EXCEPT?
A: Additional Living Expenses
B: Fair Rental Value
C: Dwelling
D: Other structures: A
6. Which of the following dwelling policies insures a structure on an actualcash value basis?
A: DP-1
B: DP-2
C: DP-3
D: DP-6: A
7. All of the following are characteristics of the dwelling policy EXECPT?
A: Coverage includes the dwelling only, contents only, or both
B: Incidental occupancy of limited service-type exposure is permitted
C: Dwellings up to four family units are eligible
D: The dwelling must be owner-occupied: D
8. A building contractor constructs a rental property home using
"straw-blue" construction that does not conform to standard building codes.The contractor,
who is also the owner, does not want insurance on the buildingbut wants coverage on as many
other things as he can get. What coverage plan should be a producer recommend?
A: HO-2
B: HO-4
C: HO-5
, D: Coverage cannot be extended on this structure: D
9. What organization is responsible for administering the plan that ensuresaccess to property
insurance for beach properties?
A: Division of Insurance
B: Post-Assessment Guaranty Association
C: North Carolina Insurance Underwriting AssociationD: FAIR Plan: C
10. Which type of losses are covered by the standard policy?
A: Indirect LossesB: Direct Losses C: Both
D: Neither: B
11. If a licensee is convicted in any court for any offense, other than a traffic violation, the
licensee must notify the Commissioner within how many daysof the conviction date?
A: 10 days
B: 30 days
C: 20 days D: 15 days: A
12. Which of the following commercial property causes of loss forms explicitlycovers damages
from falling objects?
A: General FormB: Basic form
C: Broad form
D: Special Form: C
13. In order for a dwelling to be covered on a replacement cost basis, thedwelling must be
insured up to at least?
A: 20% of the replacement cost B: 40% of the replacement cost C: 60% of the replacement
cost D: 80% of the replacement cost: D
14. The main difference between an HO-4 and HO-6 is?
A: HO-6 does not cover additional living expenses
