Property & Casualty Insurance License Test Property Insurance Policies Questions and Answers

Question 1

A commercial property is valued at $1,000,000 and insured for $600,000.
The policy includes an 80% coinsurance clause and a $1,000 deductible.
If a covered fire causes $200,000 in damages, how much will the insurance company pay for the loss?

Accepted Answer

$149,000

Answer

$150,000

Answer

$199,000

Answer

$200,000

Question 2

Which section of a standard property insurance policy personalizes the contract by specifying the named insured, property address, policy period, coverages, and premium amounts?

Accepted Answer

Declarations

Answer

Insuring Agreement

Answer

Conditions

Answer

Exclusions

Question 3

A landlord owns a rental house and wants to purchase a Dwelling Policy. They desire broad, named-peril coverage for the structure and its contents, including protection against risks like the weight of ice and snow, and falling objects. Which policy form best suits their needs?

Accepted Answer

DP-2 (Broad Form)

Answer

DP-1 (Basic Form)

Answer

DP-3 (Special Form)

Answer

HO-4 (Contents Broad Form)

Question 4

Under the Standard Mortgage Clause in a property insurance policy, if an insured intentionally sets fire to their own home, how will the claim be handled for the mortgagee?

Accepted Answer

The mortgagee's claim will be paid to the extent of their financial interest, but the insured's claim will be denied.

Answer

The claim will be denied for both the insured and the mortgagee.

Answer

The insurer will pay the full limit of the policy to the mortgagee, regardless of their interest.

Answer

The claim will be paid to the insured, who is then responsible for paying the mortgagee.

Question 5

Which of the following is an example of an 'Additional Coverage' commonly found in a standard Homeowners or Commercial Property policy, provided at no extra premium?

Accepted Answer

Debris Removal

Answer

Earthquake Damage

Answer

Flood Damage

Answer

Scheduled Personal Property

Question 6

A homeowner's policy includes Coverage D - Loss of Use. A covered peril makes the home uninhabitable for two weeks during repairs. Which of the following expenses would be covered under Loss of Use?

Accepted Answer

The cost to rent a similarly sized apartment, exceeding the insured's normal housing costs.

Answer

The full cost of a luxury hotel suite.

Answer

The mortgage payment for the two-week period.

Answer

The cost of groceries for the two weeks.

A commercial property is valued at $1,000,000 and insured for $600,000.The policy includes an 80% coinsurance clause and a $1,000 deductible.If a covered fire causes $200,000 in damages, how much will the insurance company pay for the loss?

A commercial property is valued at $1,000,000 and insured for $600,000.
The policy includes an 80% coinsurance clause and a $1,000 deductible.
If a covered fire causes $200,000 in damages, how much will the insurance company pay for the loss?