PEARSON VUE: PROPERTY INSURANCE PRACTICE EXAM

PDF Download

PEARSON VUE: PROPERTY INSURANCE PRACTICE EXAM

Qs and Ans - Expert- Explanation - ing score -50 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Which of the following policy forms would BEST protect a business that must keep operating after a loss?

• Extra Expense
• Business Income
• Gross Earnings
• Contingent Business Interruption

Answer:

A Question 2: Which of the following sources may be used to provide property insurability information?

• Police records
• Physical inspections
• Checking account statements
• Lie detector tests

Answer:

B

Question 3: The principle of indemnity is designed to avoid:

• two policies sharing payment for a loss
• overpayment of a claim
• the return of earned premiums
• a Coinsurance clause of less than 80 percent

Answer:

B Question 4: The Personal Liability section of a Homeowners policy covers which of the following options?

• Damage to an insured's property caused by a visitor
• Bodily injury to a resident caused by a neighbor's dog
• Property damage caused by war
• Bodily injury caused by the personal activities of an insured

Answer:

D Question 5: A building adjacent to an insured's business is severely damaged by fire. Because of the nature of the damage to the adjoining property, the insured is denied access to the business by the fire department. If the insured's property is covered under a Business Income

Coverage Form, the insurer will cover the loss of earnings for a MAXIMUM of:

• three weeks
• thirty days
• sixty days
• six months

Answer:

A

Question 6: An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts?

A. $1,000

B. $1,250

C. $1,400

D. $1,500

Answer:

B Question 7: The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy?

• Declarations
• Insuring Agreement
• Conditions
• Exclusions

Answer:

C Question 8: Which of the following perils is covered by Broad Form perils but is not covered by the Basic Form?

• Vandalism
• Weight of ice and snow
• Riot
• Windstorm

Answer:

B

Question 9: All of the following perils are covered under a Building and Business Personal

Property Coverage Form with a Causes of Loss-Basic Form attached EXCEPT:

• smoke
• sprinkler leakage
• sinkhole collapse
• earth movement

Answer:

D Question 10: X insures a home for $100,000 under a Dwelling Property Broad Form (DP-2). If a flood causes $1,000 in damage to the home's contents, which of the following MAXIMUM amounts will X's insurer pay?

• $0

B. $800

C. $900

D. $1,000

Answer:

A Question 11: A Commercial Property policy specifies which of the following responsibilities as a duty of the insured?

• To return the policy if it is canceled by the insurer
• To provide a sworn Proof of Loss statement if requested by the company
• To pay the mortgagee in full in the event of a total loss
• To pay premiums within thirty days after receiving an invoice

Answer:

B