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Iowa Property Practice Exam

20 exam-style questions drawn from the same bank as our full Iowa Property course (Iowa 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. Under Iowa Code 515B.5, what is the ordinary per-claim ceiling of the guaranty association?
300,000 dollars100,000 dollars1,000,000 dollars500,000 dollars
2. The 'Common Policy Conditions' (IL 00 17) of a Commercial Package Policy include all of the following EXCEPT:
CancellationTransfer of rights of recovery (subrogation)CoinsuranceInspections and surveys
3. A buyer pays the carrier's quoted premium of $3,200 by check at the producer's office. The producer hands the buyer a signed binder. Which two elements of consideration are present in this transaction?
Insured's signature and insurer's countersignatureInsured's application and insurer's underwriting reviewProducer's commission and carrier's licensureInsured's premium and insurer's promise to pay covered losses
4. Compared to a CPP, the BOP typically:
Requires the insured to schedule each coverage separately on its own coverage partIncludes business income coverage automatically (12 months, no separate limit)Excludes general liability entirely under BP 00 03, requiring a separate monoline CGL formHas higher per-occurrence CGL limits than the equivalent CG 00 01 occurrence-form coverage part
5. Vicarious liability holds one party legally responsible for another's actions, most commonly when:
An employer is held liable for an employee's negligent acts within the scope of employmentA motorist runs a red light and personally causes a collision, which is direct first-person negligence rather than vicarious responsibilityAn insured commits arson against the insured's own covered property to trigger a fraudulent fire-loss claim under the homeowners policyA stranger is injured by an unknown third party with no employment, agency, or other legal relationship connecting them to the insured
6. An Agreed Value option on a BPP policy:
Eliminates the deductible required under the BPP Loss Conditions section once the property limit equals replacement cost at policy inceptionSuspends the coinsurance condition for the policy term in exchange for a Statement of ValuesApplies only to inland marine property scheduled on a Personal Articles Floater or a Contractors Equipment Floater under the CM coverage partCaps recovery at the property's market value as of the date the loss occurs, regardless of the higher replacement-cost figure on the SOV form
7. Actual cash value (ACV) is most commonly defined as:
Replacement cost without depreciationOriginal purchase price plus inflationMarket value at the time of saleReplacement cost minus depreciation
8. The homeowners Section II medical payments to others coverage (Coverage F) pays medical expenses for injuries to whom?
The named insured and resident family members, as long as the injury occurs at the insured location or while travelingPersons on the insured location with permission, or off the location if caused by the insuredAnyone injured anywhere in the world at the insured's fault, including resident relatives and household employeesOnly invited guests while physically inside the dwelling, and only when the injury arises from a defect in the structure
9. Under a replacement cost policy for a dwelling, an insured has a $20,000 loss. The insurer initially pays how much, and under what condition will the depreciation holdback be released?
ACV initially; the holdback is released once the insured files proof of loss.ACV initially; the depreciation holdback is released once the insured actually repairs or replaces the damaged property.Full replacement cost immediately; no conditions apply.Nothing until repairs are fully complete — applicable to surplus-lines placements, which the scenario explicitly excludes
10. On a commercial property application, the insured states the building has 'a fully functioning sprinkler system throughout.' This statement is incorporated into the policy by reference and labeled a warranty. After a fire, the carrier discovers the sprinklers in the basement were drained for repairs. Which is the most likely result?
The carrier may rescind or void coverage because a warranty was breached, regardless of materialityWarranties have no legal effect in modern policies under the abolition-of-warranty rule that displaced common-law warranty enforcementThe carrier may only reduce the claim proportionally under the partial-warranty-breach formula adopted by most modern P&C statutesThe carrier must pay the loss because the misstatement was unintentional under the good-faith rule applied to standard property warranties
11. Which homeowners form covers the dwelling on an open-peril basis but personal property on a named-peril basis?
HO-2HO-3HO-8HO-5
12. Which chapter of the Iowa Code carries insurer receivership, the commissioner acting as receiver?
Chapter 505Chapter 522BChapter 507CChapter 507B
13. Under an unendorsed ISO HO-3, which of the following types of water damage IS covered?
Sewer and drain backup from the municipal sewer system that pushes water up through the dwelling's plumbing fixturesGradual seepage over weeks from a leaking shower pan that was unknown to the insured until the damage became visibleFlood (surface water entering the dwelling from outside), provided the loss occurs during a federally declared disaster eventAccidental discharge from a plumbing, heating, or air-conditioning system inside the dwelling
14. Which federal statute governs the privacy of nonpublic personal financial information in insurance?
Sherman Antitrust ActTerrorism Risk Insurance ActGramm Leach BlileyFair Credit Reporting Act
15. The 'parol evidence rule' as applied to insurance contracts means:
Oral side agreements always override the written policy language whenever the insured testifies that a different agreement was reached orallyDisinterested witnesses must be physically present at the signing of every policy issued in the state for the contract to be legally enforceableEvery oral agreement between insured and producer is enforceable as if it were a written endorsement attached to the policy under filed formsOnce a written policy is final, prior or contemporaneous oral agreements generally cannot vary or contradict its written terms
16. An Accounts Receivable form is an inland marine coverage that pays for:
Bad debts unrelated to any covered cause of loss, including any ordinary commercial credit losses the insured experiences as a normal cost of doing businessPremiums owed by the insured to the carrier under the IL 00 17 Common Policy Conditions, which obligates the insured to pay premium at the stated termsMoney or securities stolen from a safe on the insured's premises, an exposure addressed instead by the Commercial Crime CR 00 20 insuring agreementSums the insured cannot collect from customers because A/R records were destroyed by a covered cause of loss
17. Under Iowa Code 515.125, how much notice is required to cancel for nonpayment of premium?
At least twenty daysAt least ten daysAt least thirty daysAt least sixty days
18. A mobile-home owner wants coverage tailored to a manufactured home on a private lot. Which form is most appropriate?
HO-3, written with a manufactured-home valuation endorsement to handle transportation and tie-down exposuresHO-4, because manufactured homes are typically treated as contents rather than as a permanently affixed dwellingHO-7 Mobilehome (or the equivalent Mobile Home Endorsement to an HO policy)DP-1, because the dwelling form is the only product that contemplates structures resting on a chassis or piers
19. On an application, the insured omits mentioning that the garage contains flammable solvents stored for a side business. The insurer does not ask the question. A later fire destroys the home. Which defense is the insurer most likely to rely on, and what must it prove?
Breach of warranty — any undisclosed fact voids the policy — applicable to commercial scenarios only, not the personal-lines contextMisrepresentation — the insurer must prove the insured affirmatively stated something false, consistent with the model regulation but inapplicable to this scenarioFraud — the insurer must prove the insured intentionally burned the home — required under a separate compliance provision that doesn't reach this fact patternConcealment — the insurer must prove the insured intentionally withheld a material fact that it had a duty to disclose.
20. A homeowners policy lists Coverage A at $300,000 and provides Coverage B (other structures) with no scheduled limit. What is the Coverage B limit?
$30,000 — 10% of Coverage A$300,000 — equal to Coverage A$60,000 — 20% of Coverage A$150,000 — 50% of Coverage A

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