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

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: A business worries that if its accounts receivable records were destroyed by a fire, it would be unable to prove and collect the money that its customers currently owe it. Which inland marine form is designed to respond to that specific exposure for the business?

Installation floater

Contractor's equipment floater

Accounts receivable form

Motor truck cargo form

Question 42: The businessowners policy is aimed at small and mid-sized businesses, and insurers apply eligibility limits based on size to decide which firms may buy one. Under common businessowners eligibility guidelines, a business generally must have annual revenues at or below what amount in order to qualify?

20 million dollars

1.5 million dollars

750,000 dollars

6 million dollars

Question 43: The businessowners policy packages both property and liability coverage together into one contract designed for a small business owner. Regarding the perils that apply to the covered property, how is that property coverage typically written under a standard, unendorsed businessowners policy?

On an open-peril basis

On a basic named-peril basis only

With no property coverage

Fire and lightning only

Question 44: Although the businessowners policy conveniently bundles several coverages together for a small business, it does not include every single coverage that a growing business might eventually need to buy. Which of the following coverages is NOT provided by a standard businessowners policy?

Business personal property coverage

Building coverage

Business auto and professional liability

General liability coverage

Question 45: A small business owner with pressurized boilers and electrical machinery wants coverage for sudden mechanical or electrical breakdown of that equipment under a businessowners policy. How is equipment breakdown coverage handled on a standard businessowners policy for a business like this?

Included only in the liability section

Automatically included at no cost

Never available on a businessowners policy

Optional, added by endorsement

Question 46: A standard businessowners policy applies a base property deductible that the insured must absorb on each building and business personal property loss before the insurer pays the rest. What is the standard base property deductible on a typical businessowners policy?

250 dollars

500 dollars

1,000 dollars

2,500 dollars

Question 47: Under the National Flood Insurance Program's Regular Program, the government sets maximum coverage limits that a homeowner may buy on a residential building and on its contents. What are the maximum limits for a single-family residential building and its separate contents under that Regular Program?

250,000 dollars building; 100,000 dollars contents

100,000 dollars building; 50,000 dollars contents

500,000 dollars building; 500,000 dollars contents

250,000 dollars building; 250,000 dollars contents

Question 48: A homeowner who is not buying flood insurance in connection with any loan applies for a brand-new National Flood Insurance Program policy on the home. Absent a special exception, how long is the standard waiting period before that new flood policy actually takes effect for the homeowner?

60 days

10 days

30 days

No waiting period

Question 49: Property insurance frequently settles losses at actual cash value rather than at full replacement cost, especially for older personal property that has lost value over time. Which of the following correctly states how actual cash value is generally calculated for a covered property loss?

The property's free-market resale price

Original purchase price plus inflation

Replacement cost with no deduction

Replacement cost minus depreciation

Question 50: A standard mortgage clause is attached to a property policy to protect the mortgagee's financial interest in the insured real property that secures its loan. If the insured owner intentionally burns down the building, how does the standard mortgage clause treat the innocent mortgagee's separate claim?

The mortgagee's claim is voided too

The mortgagee is still paid

Only the owner is paid

No one receives any payment

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