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Delaware Property Practice Exam

20 exam-style questions drawn from the same bank as our full Delaware Property course (Delaware Insurance Producer - Property - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. The primary purpose of a coinsurance clause on a property policy is to:
Make the insurer pay more than the policy limit on a covered partial loss, which no standard form ever permits regardless of coinsuranceEncourage the insured to insure the property close to its full value, keeping rates equitableEliminate the deductible on covered partial losses, a feature that exists only with a separately purchased No-Deductible EndorsementCover speculative risks such as commodity hedging or equity-investment exposures, which are uninsurable under any standard P&C form
2. Which of the following is an 'additional coverage' typically provided on a homeowners policy at no additional premium (subject to sublimits)?
Flood, surface water, and sewer backup arising from heavy rainfall on or near the insured premisesDebris removal, trees/shrubs/plants, and fire-department service chargeEarthquake and earth movement, including landslide, mudslide, and ground subsidenceBusiness pursuits liability and incidental business use of the insured's home
3. A commercial building has a replacement cost of $1,000,000. The policy carries an 80% coinsurance clause. The insured carries only $600,000 in limits. A partial loss of $200,000 occurs. How much does the insurer pay (before deductible)?
$200,000 — the full loss is paid; coinsurance does not reduce partial-loss recoveries.$100,000 — a flat 50% coinsurance penalty on the loss.$120,000 — ($600,000 / $1,000,000) × $200,000.$150,000 — (Amount Carried / Amount Required) × Loss = ($600,000 / $800,000) × $200,000.
4. Which commercial property coverage form insures a building and its permanently installed equipment owned by the named insured?
Building and Personal Property Coverage Form (CP 00 10)Commercial General Liability Coverage Form — applies if the loss is partial; this question describes a constructive total lossBusinessowners Coverage Form (BP 00 03), under the broader consumer-protection construction sometimes applied hereBusiness Auto Coverage Form — only when the contract was issued before the regulatory amendment described above
5. Under the Terrorism Risk Insurance Act (TRIA) as currently reauthorized, what is a commercial P&C insurer's obligation to its commercial insureds regarding terrorism coverage?
The insurer must make terrorism coverage available on substantially the same terms as the underlying policy; the insured may accept or reject, and the premium for terrorism coverage must be separately and conspicuously disclosed.The insurer must include terrorism coverage automatically in every commercial policy at no additional premium — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishThe insurer must offer terrorism coverage only to insureds located in designated high-risk cities, under the alternative procedure that applies only when both parties stipulate to it in writingThe insurer is prohibited from offering terrorism coverage on commercial policies because the federal government provides it directly to insureds, per the safe-harbor exception that activates only for primary-state filings
6. On Monday a client buys a house in a non-mandatory flood zone and asks you to bind a new NFIP policy that day because a tropical storm is forecast to make landfall on Friday. The purchase is NOT tied to a mortgage closing. When will coverage be effective?
At 12:01 a.m. the day after the application is signed30 days after the application and presentment of premiumOne day after application, because the property is newly mappedImmediately, because flood coverage binds at application
7. The principle of indemnity is intended to:
Restore the insured to approximately the same financial position they were in before the loss, no better and no worseAllow the insured to profit financially from a covered loss above and beyond the actual property value at the time of the lossPay the actual amount of loss without regard to the limit shown on the dec page, which would render the limit-of-liability clause meaninglessPay only the stated policy limit regardless of the actual amount of loss the insured has demonstrated under any sworn proof of loss
8. What does a Write Your Own arrangement mean for the coverage a client receives?
The carrier may broaden the form to compete for the businessThe coverage, rules and rates are the programme's, not the carrier'sThe client may negotiate the deductible with the carrierThe carrier bears the flood risk instead of the programme
9. For property insurance, insurable interest must exist:
Only at policy inceptionInsurable interest is not required for propertyOnly at the time of lossBoth at policy inception and at the time of loss
10. A consumer reporting agency sells insurers a report summarizing an applicant's prior claims history from multiple carriers. This report is commonly known as:
A certificate of insurance — required under a separate compliance provision that doesn't reach this fact patternA credit score, consistent with the model regulation but inapplicable to this scenarioA SR-22 filing — applicable to commercial scenarios only, not the personal-lines contextA CLUE (Comprehensive Loss Underwriting Exchange) report.
11. Which section does the outline cite for publicized founded complaints?
Section 907Section 2305Section 2308Section 1714
12. The SFIP has a standard waiting period before coverage becomes effective. The standard wait is:
5 calendar days60 calendar days24 hours30 calendar days
13. On a P&C application, false statements made by the applicant generally:
May allow the insurer to rescind the policy if the misstatement is materialHave no impact at all on the coverage subsequently issued by the carrier under the policy, regardless of whether the misstatement is material to underwritingEliminate the per-occurrence deductible stated on the dec page, a benefit that no standard policy or any state insurance code actually provides as a remedyAlways result in larger covered claim payouts at the time of loss, the opposite of the rescission remedy that material misstatements actually trigger
14. An insured's home is damaged by a negligent contractor. The insurer pays the $40,000 repair under the homeowners policy and then sues the contractor to recover what it paid. What doctrine allows this?
SubrogationAbandonmentAssignmentEstoppel
15. A homeowner's vacation cabin has been on the market for three years. Its replacement cost is $400,000, but the best offer has been $180,000. A tornado destroys the cabin. Which valuation method generally produces the HIGHEST recovery?
Replacement cost.All three produce the same result.Actual cash value (RC minus depreciation).Market value.
16. Under a standard ISO HO-3, the special limit for theft of jewelry, watches, and furs is:
$2,500$1,000$1,500$5,000
17. The NFIP is administered by:
HUDThe Federal ReserveFEMAThe state department of insurance
18. Which Business Income form covers BOTH business income AND extra expense?
CP 00 50 (Extra Expense only)CP 10 30 (Causes of Loss — Special Form)CP 00 30 (Business Income with Extra Expense)CP 00 32 (Business Income without Extra Expense)
19. What triggers the higher penalty tier in section 2308?
The Commissioner has issued a prior warning letterThe violator is an insurer rather than an individualThe person knew or reasonably should have known of the violationThe violation caused a consumer a financial loss
20. A plaintiff in a negligence case is awarded $50,000 for pain and suffering, $30,000 for medical bills, and $10,000 in lost wages. Which category is GENERAL damages, and which are SPECIAL damages?
Pain and suffering is GENERAL; medical bills and lost wages are SPECIAL.All are general damages.All are special damages.Pain and suffering is SPECIAL; medical bills and lost wages are GENERAL.

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