FX INSURANCE TEST PAPER 2025/2026 QUESTIONS AND
ANSWERS GUARANTEE A+
✔✔In property insurance, actual cash value is defined as which of the following? -
✔✔Replacement cost at the time of the loss, less depreciation
✔✔Which of the following is the basis for a claim against an insurance policy? - ✔✔Loss
✔✔Which of the following is most likely to occur if it is determined by the audit that the
deposit premium was too high? - ✔✔The insured will receive a return premium.
✔✔In terms of parties to a contract, which of the following does NOT describe a
competent party? - ✔✔The person must have at least completed secondary education.
✔✔A small restaurant was forced to close for 10 days in August when the power
company's transformer was destroyed by lightning, and the restaurant was without
electricity. Which of the following endorsements could be added to the businessowners
policy that would provide protection against loss of income from such events? -
✔✔Utility services - time element endorsement
✔✔Coverage for all of the following is found in Section I of a homeowners policy
EXCEPT - ✔✔Personal liability.
✔✔Which of the following policies will help an auto dealership cover most of its liability
exposures? - ✔✔A garage liability coverage
✔✔If a liability policy had split limits of 50/100/30, what is the maximum amount that
would be payable in the event of injury to a single person? - ✔✔$50,000
✔✔Surety bonds are written for a definite limit called - ✔✔The bond penalty.
✔✔The War, Military Act, and Terrorism Exclusion will only apply to an incident of
terrorism in which the total of insured damage to all types of property in the United
States, its territories and possessions, Puerto Rico and Canada exceeds what amount?
- ✔✔$25,000,000
✔✔What term includes damage where the insured peril was the proximate cause of
loss? - ✔✔Direct loss
✔✔A used car dealer takes a car in trade as partial payment for a car on its car lot. The
customer promises to bring in the car's title but does not. Another customer takes the
trade-in for a test drive and has an accident. In regard to the dealership's business auto
physical damage coverage, which of the following it true? - ✔✔There is no coverage.
, ✔✔What type of information would be found in a policy's insuring agreement? -
✔✔Renewal dates
✔✔For a contract to be enforceable by law, the purpose of the contract must be -
✔✔Legal and not against public policy.
✔✔Property insurance that provides $100,000 coverage for a building and $50,000
coverage for personal property at a single location is called - ✔✔Specific coverage.
✔✔A professional liability policy will provide coverage for loss in all of the following
cases, except, when the insured doctor was shown to be - ✔✔Criminally negligent.
✔✔The inspections and surveys condition in a businessowners policy - ✔✔Allows the
insurer the right to inspect the insured's premises.
✔✔The part of the insurance contract that describes the covered perils and the nature
of coverage of the contractual agreement between the insurer and the insured is called
the - ✔✔Insuring agreement.
✔✔Duties of the insurer found in property policy conditions include all of the following
EXCEPT - ✔✔Notify the insured in the event of financial difficulty.
✔✔In insurance, an offer is usually made when - ✔✔An applicant submits an
application to the insurer.
✔✔The at-fault driver in an insured's auto crash had the state required minimums for
auto liability coverage, but not enough to pay for all the damage done to the insured.
This driver is - ✔✔Considered underinsured.
✔✔A dwelling policy has a standard deductible that applies to all property coverage,
except fair rental value, additional living expense, and the fire department service
charge. How much is this deductible? - ✔✔$250
✔✔In which of the following types of property valuation will the policy pay the full value
as specified on the policy schedule, regardless of the insured property's appreciation or
depreciation? - ✔✔Agreed value
✔✔A specific coverage part is listed on the commercial package policy declarations
page, but there is no premium shown. What does that mean? - ✔✔There is no
coverage.
ANSWERS GUARANTEE A+
✔✔In property insurance, actual cash value is defined as which of the following? -
✔✔Replacement cost at the time of the loss, less depreciation
✔✔Which of the following is the basis for a claim against an insurance policy? - ✔✔Loss
✔✔Which of the following is most likely to occur if it is determined by the audit that the
deposit premium was too high? - ✔✔The insured will receive a return premium.
✔✔In terms of parties to a contract, which of the following does NOT describe a
competent party? - ✔✔The person must have at least completed secondary education.
✔✔A small restaurant was forced to close for 10 days in August when the power
company's transformer was destroyed by lightning, and the restaurant was without
electricity. Which of the following endorsements could be added to the businessowners
policy that would provide protection against loss of income from such events? -
✔✔Utility services - time element endorsement
✔✔Coverage for all of the following is found in Section I of a homeowners policy
EXCEPT - ✔✔Personal liability.
✔✔Which of the following policies will help an auto dealership cover most of its liability
exposures? - ✔✔A garage liability coverage
✔✔If a liability policy had split limits of 50/100/30, what is the maximum amount that
would be payable in the event of injury to a single person? - ✔✔$50,000
✔✔Surety bonds are written for a definite limit called - ✔✔The bond penalty.
✔✔The War, Military Act, and Terrorism Exclusion will only apply to an incident of
terrorism in which the total of insured damage to all types of property in the United
States, its territories and possessions, Puerto Rico and Canada exceeds what amount?
- ✔✔$25,000,000
✔✔What term includes damage where the insured peril was the proximate cause of
loss? - ✔✔Direct loss
✔✔A used car dealer takes a car in trade as partial payment for a car on its car lot. The
customer promises to bring in the car's title but does not. Another customer takes the
trade-in for a test drive and has an accident. In regard to the dealership's business auto
physical damage coverage, which of the following it true? - ✔✔There is no coverage.
, ✔✔What type of information would be found in a policy's insuring agreement? -
✔✔Renewal dates
✔✔For a contract to be enforceable by law, the purpose of the contract must be -
✔✔Legal and not against public policy.
✔✔Property insurance that provides $100,000 coverage for a building and $50,000
coverage for personal property at a single location is called - ✔✔Specific coverage.
✔✔A professional liability policy will provide coverage for loss in all of the following
cases, except, when the insured doctor was shown to be - ✔✔Criminally negligent.
✔✔The inspections and surveys condition in a businessowners policy - ✔✔Allows the
insurer the right to inspect the insured's premises.
✔✔The part of the insurance contract that describes the covered perils and the nature
of coverage of the contractual agreement between the insurer and the insured is called
the - ✔✔Insuring agreement.
✔✔Duties of the insurer found in property policy conditions include all of the following
EXCEPT - ✔✔Notify the insured in the event of financial difficulty.
✔✔In insurance, an offer is usually made when - ✔✔An applicant submits an
application to the insurer.
✔✔The at-fault driver in an insured's auto crash had the state required minimums for
auto liability coverage, but not enough to pay for all the damage done to the insured.
This driver is - ✔✔Considered underinsured.
✔✔A dwelling policy has a standard deductible that applies to all property coverage,
except fair rental value, additional living expense, and the fire department service
charge. How much is this deductible? - ✔✔$250
✔✔In which of the following types of property valuation will the policy pay the full value
as specified on the policy schedule, regardless of the insured property's appreciation or
depreciation? - ✔✔Agreed value
✔✔A specific coverage part is listed on the commercial package policy declarations
page, but there is no premium shown. What does that mean? - ✔✔There is no
coverage.
