NPCI - Nevada Property and Casualty Insurance Exam

Question 21: Among the special theft limits in a homeowners policy, firearms and related equipment have their own separate cap that differs from the jewelry limit and is easy to confuse on the exam. What is the special limit for the theft of firearms and related equipment under a standard homeowners policy?

2,500 dollars

1,500 dollars

500 dollars

200 dollars

Question 22: One important difference between homeowners policies and dwelling policies concerns whether theft of personal property is built in or must be purchased. Regarding theft coverage on personal property, how do the standard homeowners forms and the standard dwelling forms differ from one another?

Both include theft automatically

Homeowners include theft; dwelling forms do not

Neither includes theft automatically

Dwelling forms include theft; homeowners do not

Question 23: Unless a specific endorsement is added to the policy, a homeowners form does not pay the full cost to buy brand-new replacements for damaged belongings; it deducts for wear and age instead. On what basis is personal property settled under an unendorsed homeowners policy after a covered loss?

Agreed value

Replacement cost automatically

Actual cash value

Market value

Question 24: A candidate studying the homeowners forms notices that although the property coverages differ from one form to the next, one entire section of the policy stays exactly the same across every homeowners form. Which of the following statements about the homeowners forms is correct?

All forms use open-peril coverage

Section I property is identical across forms

Coverage C is identical across forms

Section II liability is identical across forms

Question 25: The commercial Building and Personal Property coverage form, usually abbreviated BPP, can insure much more than just the insured's own building, listing each category separately on the declarations page. Which three categories of property can the BPP coverage form insure for a commercial insured?

Building, business personal property, others' property

Only the building itself

Building and land only

Vehicles and inventory only

Question 26: The BPP coverage form extends coverage to business personal property located outside the building but still reasonably near the described premises, such as goods sitting in the yard or in a vehicle. Within what distance of the described premises must that property in the open be to remain covered?

Within 500 feet

Within 50 feet

Within 100 feet

Within 1,000 feet

Question 27: A commercial property policy must attach a causes-of-loss form that specifies which perils actually apply to the covered property listed elsewhere in the policy. The commercial property program offers three such forms of increasing breadth. What are the names of those three causes-of-loss forms?

Standard, deluxe, and premier

Named, scheduled, and blanket

Fire, extended, and comprehensive

Basic, broad, and special

Question 28: The basic causes-of-loss form for commercial property lists a specific set of named perils it will cover. In addition to fire, lightning, explosion, windstorm, smoke, and several others, which of the following perils is also included within the basic causes-of-loss form?

Flood

Sprinkler leakage

Earthquake

Mechanical breakdown

Question 29: A cautious business owner wants the broadest commercial property coverage available and does not want to rely on a fixed list of named perils. Which causes-of-loss form covers direct physical loss to covered property unless the loss is specifically excluded, rather than listing the covered perils one by one?

The special causes-of-loss form

The basic causes-of-loss form

The broad causes-of-loss form

The named causes-of-loss form

Question 30: A commercial property policy contains an eighty percent coinsurance clause, and the insured has failed to carry that much insurance relative to the building's value. When such an underinsured insured suffers a partial loss, how is the coinsurance penalty applied to determine the amount actually paid?

The loss minus the deductible only

Required divided by carried, times loss

Carried divided by required, times the loss

The full loss regardless of coverage

Question 31: An insured has underinsured a commercial building that carries an eighty percent coinsurance requirement, and the building is later completely destroyed in a covered fire. How does the coinsurance clause affect the payment when the loss is a total loss up to the full policy limit?

The insured must pay half

The penalty still reduces the payment

The insurer pays nothing at all

Coinsurance does not penalize a total loss

Question 32: Under the BPP vacancy condition, coverage changes once a building has been vacant beyond a set period before a loss occurs, which can surprise an owner of idle property. After a building has been vacant more than sixty consecutive days, how does the vacancy condition treat an otherwise covered loss?

Other covered losses reduced fifteen percent

All coverage voided completely

Losses reduced by fifty percent

No effect on any coverage

Question 33: The BPP coverage form includes an additional coverage that pays for the liability an insured assumes for fire department charges when the department responds to save covered property. As additional coverage above the policy limit, what amount does the BPP provide for the fire department service charge?

2,500 dollars

500 dollars

1,000 dollars

250 dollars

Question 34: A builders risk coverage form insures a building while it is under construction, and that coverage does not last forever; it ends automatically at the earliest of several listed events. Which of the following is one of the events that ends builders risk coverage on the project?

One year after the policy begins

Ninety days after construction is complete

Thirty days after the first loss

When the foundation is poured

Question 35: Business income coverage is a time-element coverage that responds when a covered peril suspends a firm's normal operations, replacing the income the business would otherwise have earned. Over what period does business income coverage pay the lost net income and the continuing normal operating expenses?

One year from the loss

A flat thirty-day period

Until the policy expires

The period of restoration

Question 36: Inland marine coverage historically grew out of ocean marine insurance and is very often written on portable forms called floaters, a name that hints at how the coverage behaves. Which of the following statements best describes a defining characteristic of most inland marine floater coverage?

Coverage moves with the property insured

Coverage applies only at a fixed location

It insures only real estate

It covers only ocean voyages

Question 37: Property insurance often addresses situations where one party holds another party's property temporarily for some purpose and must later return it. When a customer leaves clothing with a dry cleaner for cleaning, what is the dry cleaner properly called in relation to the customer's property?

The insurer

The bailor

The bailee

The mortgagee

Question 38: A bailee such as a repair shop can buy a bailee's customer policy to protect the property that its customers leave with it. When a covered loss occurs to a customer's property, whom does a bailee's customer policy pay, and does the bailee's own legal liability for the loss matter?

The customer, only after a lawsuit

The bailee, only if legally liable

The insurer keeps the payment

The customer, regardless of the bailee's liability

Question 39: Two different inland marine forms address cargo carried on trucks. One covers a for-hire carrier's legal responsibility for goods it hauls for other people; the other covers a firm hauling its own goods. Which of the following correctly describes the motor truck cargo trucker's form specifically?

Liability coverage for a carrier's bailee responsibility

Direct damage to the owner's own goods

Coverage for the truck itself

Coverage for driver injuries only

Question 40: A construction contractor owns many tools, machines, and pieces of heavy equipment that move constantly from one job site to another rather than staying at a single location. Which inland marine form is designed to cover this kind of mobile equipment, whether it is owned, rented, or borrowed?

Building and personal property form

Contractor's equipment floater

Accounts receivable form

Valuable papers form

NPCI Nevada Property and Casualty Insurance Exam - Set 3 - Part 2

Question 24: A candidate studying the homeowners forms notices that although the property coverages differ from one form to the next, one entire section of the policy stays exactly the same across every homeowners form. Which of the following statements about the homeowners forms is correct?

Question 28: The basic causes-of-loss form for commercial property lists a specific set of named perils it will cover. In addition to fire, lightning, explosion, windstorm, smoke, and several others, which of the following perils is also included within the basic causes-of-loss form?

Question 31: An insured has underinsured a commercial building that carries an eighty percent coinsurance requirement, and the building is later completely destroyed in a covered fire. How does the coinsurance clause affect the payment when the loss is a total loss up to the full policy limit?

Question 34: A builders risk coverage form insures a building while it is under construction, and that coverage does not last forever; it ends automatically at the earliest of several listed events. Which of the following is one of the events that ends builders risk coverage on the project?

Question 38: A bailee such as a repair shop can buy a bailee's customer policy to protect the property that its customers leave with it. When a covered loss occurs to a customer's property, whom does a bailee's customer policy pay, and does the bailee's own legal liability for the loss matter?

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