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PA Appraiser Exam Questions and Correct
Answers/ Latest Update / Already Graded
Principle of Indemnity
Ans: restoration to approximate previous financial condition;
no more, no less
Insurable Interest
Ans: direct financial interest in protecting something or
someone
Lender Interest
Ans: protects a lender who loans money to a buyer
Risk
Ans: potential for financial loss or an insured item
Exposure
Ans: is openness to loss or damage
hazard
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Ans: thing that increases the possibility to loss
moral hazard
Ans: results from policyholder's conscious decision
physical hazard
Ans: conditions that increase the chance of loss
Peril
Ans: the actual cause of loss or damage
Loss
Ans: financial loss due to an occurrence or accident
Proximate cause
Ans: the primary event or series of events that directly leads to
an insured loss
Direct loss
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Ans: physical harm to tangible property caused by a peril. Ex:
Tree falls on car
Indirect loss
Ans: added expenses or lost income because of physical
damages. Ex: rental car
Occurrence
Ans: an event, incident, or condition that causes damage
ACV (Actual Cash Value)
Ans: Replacement cost - depreciation
replacement cost
Ans: method of valuation based on cost of replacing an item at
current market prices, regardless of depreciation
Functional replacement cost
Ans: pays to replace an outdated, obsolete item with a
functionally equivalent item
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Stated amount
Ans: property value is stated by the insured when applying for
insurance
insurance policy
Ans: the legal contract b/w the insurer and the insured
cancellation and nonrenewal
Ans: insured may cancel at any time, but the insurer is mu ch
more restricted
declarations page
Ans: names of both parties
policy #
location and description of insured item
deductible
premium
first named insured
All rights reserved © 2025/ 2026 |
PA Appraiser Exam Questions and Correct
Answers/ Latest Update / Already Graded
Principle of Indemnity
Ans: restoration to approximate previous financial condition;
no more, no less
Insurable Interest
Ans: direct financial interest in protecting something or
someone
Lender Interest
Ans: protects a lender who loans money to a buyer
Risk
Ans: potential for financial loss or an insured item
Exposure
Ans: is openness to loss or damage
hazard
All rights reserved © 2025/ 2026 |
, Page |2
Ans: thing that increases the possibility to loss
moral hazard
Ans: results from policyholder's conscious decision
physical hazard
Ans: conditions that increase the chance of loss
Peril
Ans: the actual cause of loss or damage
Loss
Ans: financial loss due to an occurrence or accident
Proximate cause
Ans: the primary event or series of events that directly leads to
an insured loss
Direct loss
All rights reserved © 2025/ 2026 |
, Page |3
Ans: physical harm to tangible property caused by a peril. Ex:
Tree falls on car
Indirect loss
Ans: added expenses or lost income because of physical
damages. Ex: rental car
Occurrence
Ans: an event, incident, or condition that causes damage
ACV (Actual Cash Value)
Ans: Replacement cost - depreciation
replacement cost
Ans: method of valuation based on cost of replacing an item at
current market prices, regardless of depreciation
Functional replacement cost
Ans: pays to replace an outdated, obsolete item with a
functionally equivalent item
All rights reserved © 2025/ 2026 |
, Page |4
Stated amount
Ans: property value is stated by the insured when applying for
insurance
insurance policy
Ans: the legal contract b/w the insurer and the insured
cancellation and nonrenewal
Ans: insured may cancel at any time, but the insurer is mu ch
more restricted
declarations page
Ans: names of both parties
policy #
location and description of insured item
deductible
premium
first named insured
All rights reserved © 2025/ 2026 |
