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Vermont Property Practice Exam

20 exam-style questions drawn from the same bank as our full Vermont Property course (Vermont 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. An icy sidewalk in front of a store is an example of which type of hazard?
Moral hazardMorale hazardPhysical hazardSpeculative hazard
2. A 'sub-limit' on a property policy is best described as:
A lower limit than the per-occurrence limit applicable to a specific class of property or coverageThe flat dollar deductible applied to every covered partial loss on the BPP CP 00 10 before any indemnity payment is made by the carrierThe annual gross written premium charged for the coverage part, computed by the underwriter using the manual rate and any applicable surchargesAn additional aggregate limit layered on top of the per-occurrence limit and applicable to all property classes across the entire policy term
3. The Fair Credit Reporting Act (FCRA) regulates:
How much premium any insurer can charge for any line of business, actually a function of state insurance department rate filings, not FCRACancellation of P&C insurance policies in force, an area governed by state insurance code cancellation statutes rather than the federal FCRAHow consumer reports (including credit-based insurance scores) may be used and what notice must be given to consumersWorkers' compensation premium audit and reporting under Tex. Labor Code Title 5, an area completely separate from federal consumer-reporting law
4. A sworn written statement of the amount and details of a claim is a
Release formNotice of lossProof of lossClaim report
5. Carrying a limit close to the full value of the property is called
Stated amountAgreed valueInsurance to valueBlanket coverage
6. An insured signs a 'waiver of subrogation' agreement with a vendor BEFORE a loss. What is the typical effect under a standard property policy?
The pre-loss waiver immediately voids the entire underlying property policy from inception under every standard ISO commercial property form filed with the departmentThe waiver is treated as invalid and unenforceable in every state regardless of when it was signed, a rule no standard P&C policy or any state insurance code actually adoptsThe waiver is enforceable, and the insured has not breached the policy because the waiver was executed before the lossThe carrier must respond by doubling the per-occurrence limit on the property coverage part as a contractual penalty, a remedy that exists in no standard filed policy
7. Concealment is best described as:
A filed exclusion endorsement that narrows the policy by removing a peril or class of property from the basic coverage formPhysical loss or misplacement of the original paper policy document by the named insured, which has no effect on coverage at allIntentional failure to disclose a material fact the applicant knows the insurer would want to knowA false affirmative statement on the application that the underwriter relied on when issuing the policy, which is misrepresentation, not concealment
8. An applicant tells the producer her roof was 'replaced about 6 years ago.' The actual replacement was 7 years ago. The carrier underwrites roofs up to 15 years old. After a hail claim, the carrier wants to rescind. Which is the correct analysis?
Statement is a representation; the misstatement is immaterial, so the policy standsStatement is a warranty; any numerical deviation voids the contract under the strict-warranty ruleStatement is concealment; the policy is void from inception under the silence-on-roof-age doctrineStatement is fraud; both rescission and damages apply under the implied-fraudulent-intent inference
9. An insured sells her covered home to a buyer mid-policy and signs over the deed. The buyer assumes that the existing homeowners policy automatically follows the house. The next month a covered loss occurs. The insurer denies the buyer's claim. The denial is grounded primarily in which characteristic of insurance contracts?
Aleatory, the unequal-exchange feature means the contract has been fully extinguished once a covered loss attaches to the property itselfPersonal, the policy follows the person, not the property, and cannot be assigned without insurer consentConditional, the buyer's failure to satisfy a condition precedent is what voided the inherited policy at the moment of transfer of titleUnilateral, only the insurer owes future performance and that duty extinguishes the moment a new owner takes title to the property
10. The portion of a covered loss the insured must pay before the insurer pays is the
CoinsurancePremiumDeductibleRetention limit
11. An insurer pays a homeowners claim and then sues a defective-product manufacturer that caused the fire. Before the insurer can collect, the insured signs a release of the manufacturer in exchange for a $5,000 'goodwill' payment. The insurer's most direct legal complaint is that the insured violated which standard policy condition?
The 'do nothing to impair subrogation' / transfer-of-rights condition, the insured cannot release a third party after the insurer has paidThe cooperation clause only, the insured's signing of a release is treated as a failure to assist the insurer in pursuing its claims against the manufacturerThe appraisal clause, by signing the release the insured bypassed the appraisal mechanism the policy requires for any post-loss settlement with a third partyThe named-insured condition, once the insurer has paid, only the insurer may negotiate releases with third parties on behalf of any party listed on the declarations page
12. 8 V.S.A. §3861 bars a fire or casualty insurer from discriminating between insureds. The comparison the statute draws is between insureds:
With equal limitsOf the same classIn the same countyWith the same agent
13. The cost to repair or replace property with new material of like kind and quality, without deduction for depreciation, is
Actual cash valueSalvage valueReplacement costMarket value
14. Under comparative negligence, a plaintiff who is found 30% at fault for their own injury:
Recovers damages reduced by their percentage of fault (e.g., 70% of damages)Recovers nothing, because any share of fault on the plaintiff's part bars recovery entirelyRecovers the full amount of damages from the defendant despite the plaintiff's own 30% shareRecovers double damages as a statutory penalty against the defendant for the plaintiff's injury
15. A homeowner's contents are damaged in a covered fire. The same contents are covered under a separate floater policy for jewelry that has 'specific insurance' language. The HO policy contains standard 'other insurance' language saying it is excess over any other valid insurance specifically covering the same property. Which carrier pays first on the jewelry?
Both policies share pro-rata regardless of clause language under the contribution rule.The jewelry floater pays as primary; the HO policy responds only as excess.The homeowner selects which policy pays first under the named-insured election rule.Neither pays because dual coverage voids both policies under the anti-stacking rule.
16. A policy that pays its full face amount on a total loss without regard to actual value is a
Indemnity policyReporting policyBlanket policyValued policy
17. A small fireworks distributor with a $2M product-liability need is rejected by every admitted carrier the agent contacts. The agent locates a non-admitted carrier on the state's eligible list willing to write at $8,500 premium. Before binding, what is the agent's diligent-effort obligation?
Run a credit check on the proposed surplus lines carrier through the state's insurance department database to confirm that the carrier maintains adequate surplus and has not been the subject of any prior disciplinary action by another state regulatorNotify the state's guaranty association that a non-admitted placement is forthcoming so that the association can establish a reserve in the event the non-admitted carrier later becomes insolvent during the policy period or any extended reporting tailObtain the insured's signed waiver of any future right to sue the admitted market for refusing to write the policy, as a precondition of placing the coverage in the non-admitted surplus-lines market through a licensed brokerObtain written declinations from a statutorily required number of admitted carriers, typically three to five, documenting that the risk could not be placed in the admitted market
18. The insurer and insured disagree on the AMOUNT of loss but not on whether the loss is covered. Which policy provision provides a mechanism for resolving the dispute short of litigation?
The arbitration clause.The appraisal clause.The abandonment clause.The subrogation clause.
19. Under a standard mortgagee clause, the insured stops paying premium and the policy is cancelled. The carrier must do which of the following with respect to the mortgagee?
Refund premium directly to the mortgagee under the lender-priority refund rule used in modern statutesProvide separate written notice of cancellation to the mortgagee (typically 10 days)Issue a new policy in the mortgagee's name under the automatic-policy-substitution rule for foreclosuresContinue coverage for the mortgagee at no charge indefinitely under the open-ended-protection rule
20. The four elements of a legally enforceable contract are:
The insurer entity, the appointed agent, the named insured, and a disinterested witnessOriginal application, temporary binder, final policy issuance, and any subsequent endorsementPremium remittance, claim notice, claim settlement, and final release of the carrierOffer, acceptance, consideration, legal purpose & capacity

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