KENTUCKY PROPERTY & CASUALTY
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS.
Which of the following meets the definition of an occurrence, but not an accident?
(A) Two cars collide in a busy intersection
(B) A tree falls on a home during a storm
(C) Loss of income as a result of a fire
(D) Water damage from a leaking pipe - ANS (D) Water damage from a leaking pipe
Which of the following is not an example of insurable interest?
(A) The gas station, which is intended to be bought next week
(B) A baseball card collection given to the insured by a grandfather
(C) Personal property left at a vacation home
(D) Personal tools that are left at the station - ANS (A) The gas station, which is intended to be
bought next week
Which of the following will state that the insured will be indemnified against loss caused by fire,
lightning, and internal explosion?
(A) Named peril
(B) Stated value
(C) Special form
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,(D) Open peril - ANS (A) Named peril
An insured originally bought a house for $150,000. Today it could sell for $200,000. It is
estimated that if the house were totally destroyed it would cost approximately $180,000 to
rebuild. The replacement cost of the house is:
(A) $200,000
(B) $180,000
(C) $160,000
(D) $150,000 - ANS (B) $180,000
One of the purposes of the Other Insurance clause found in a Property Policy is to:
(A) Provide bodily injury coverage equal to property coverage offered under the contract
(B) Encourages insured to purchase adequate amounts of insurance
(C) Prevent the insured from profiting from a loss by over insuring the property
(D) Provides that if other insurance applies to the loss the insurer does not pay - ANS (C)
Prevent the insured from profiting from a loss by over insuring the property
Which of the following is necessary for a valid contract?
(A) Must show signs of duress
(B) A written agreement signed by both the applicant and the agent
(C) Acceptance must be accepted by the insured
(D) Something of value must be exchanged between each party - ANS (D) Something of value
must be exchanged between each party
If an individual is liable for the loss of another, the court can require damages be paid. What
type of damages is typically covered by liability insurance?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,(A) Punitive damages meant to punish insured for gross negligence
(B) Special damages, which includes tangible financial losses
(C) Negligent property damage to a borrowed piece of equipment
(D) Negligence that results from an intervening cause - ANS (B) Special damages, which
includes tangible financial losses
An insured purchases a property contract with a one-year policy period. Parkway through the
year the insured is informed that at the end of the policy period the insurer will no longer
provide coverage. This is known as:
(A) Cancellation with unearned premium returned on pro rata basis.
(B) Nonrenewal with no refund.
(C) All premiums will be refunded since the insurer is canceling.
(D) Cancellation with unearned premium returned on short rate basis. - ANS (B) Nonrenewal
with no refund.
In order to collect, insurable interest in Property and Casualty Insurance must exist:
(A) At the time the application is made.
(B) At the time the loss occurs.
(C) At the time of the application and at the time of the loss.
(D) Continuously throughout the policy period. - ANS (B) At the time the loss occurs.
Some teenagers decided it would be fun to sneak into the zoo at night and release some
animals. To their dismay they discover the cage they just opened was not the monkey cage but
the gorilla cage. After the gorilla chases them for several miles it decides to roam the
neighborhood. What kind of liability does the zoo have, if any?
(A) Absolute Liability.
(B) Comparative Liability.
(C) Vicarious Liability.
(D) Contributory Liability. - ANS (A) Absolute Liability.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, A fire bums a tire store. Under a property contract insuring against fire losses, the loss of
income resulting from the charred inventory would represent a/an:
(A) Direct loss
(B) Indirect loss
(C) Physical loss
(D) Fair Market loss - ANS (B) Indirect loss
All the following are examples of managing risk EXCEPT:
(A) The insured does not own a vehicle
(B) A corperation has decided to set aside a portion of its profits to pay for its own losses.
(C) The installation of a sprinkler system throughout the building
(D) A company uses the Law of Large Numbers to carefully invest in the stock market -
ANS (D) A company uses the Law of Large Numbers to carefully invest in the stock market
Which of the following policy conditions is designed to encourage you to purchase adequate
insurance protection on your property?
(A) Indemnification
(B) Subrogation
(C) Coinsurance
(D) Insurable interest - ANS (C) Coinsurance
14. Which of the following is true about liability insurance?
(A) Negligence is based upon the reasonable person
(B) A settlement is determined by a judge
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS.
Which of the following meets the definition of an occurrence, but not an accident?
(A) Two cars collide in a busy intersection
(B) A tree falls on a home during a storm
(C) Loss of income as a result of a fire
(D) Water damage from a leaking pipe - ANS (D) Water damage from a leaking pipe
Which of the following is not an example of insurable interest?
(A) The gas station, which is intended to be bought next week
(B) A baseball card collection given to the insured by a grandfather
(C) Personal property left at a vacation home
(D) Personal tools that are left at the station - ANS (A) The gas station, which is intended to be
bought next week
Which of the following will state that the insured will be indemnified against loss caused by fire,
lightning, and internal explosion?
(A) Named peril
(B) Stated value
(C) Special form
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,(D) Open peril - ANS (A) Named peril
An insured originally bought a house for $150,000. Today it could sell for $200,000. It is
estimated that if the house were totally destroyed it would cost approximately $180,000 to
rebuild. The replacement cost of the house is:
(A) $200,000
(B) $180,000
(C) $160,000
(D) $150,000 - ANS (B) $180,000
One of the purposes of the Other Insurance clause found in a Property Policy is to:
(A) Provide bodily injury coverage equal to property coverage offered under the contract
(B) Encourages insured to purchase adequate amounts of insurance
(C) Prevent the insured from profiting from a loss by over insuring the property
(D) Provides that if other insurance applies to the loss the insurer does not pay - ANS (C)
Prevent the insured from profiting from a loss by over insuring the property
Which of the following is necessary for a valid contract?
(A) Must show signs of duress
(B) A written agreement signed by both the applicant and the agent
(C) Acceptance must be accepted by the insured
(D) Something of value must be exchanged between each party - ANS (D) Something of value
must be exchanged between each party
If an individual is liable for the loss of another, the court can require damages be paid. What
type of damages is typically covered by liability insurance?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,(A) Punitive damages meant to punish insured for gross negligence
(B) Special damages, which includes tangible financial losses
(C) Negligent property damage to a borrowed piece of equipment
(D) Negligence that results from an intervening cause - ANS (B) Special damages, which
includes tangible financial losses
An insured purchases a property contract with a one-year policy period. Parkway through the
year the insured is informed that at the end of the policy period the insurer will no longer
provide coverage. This is known as:
(A) Cancellation with unearned premium returned on pro rata basis.
(B) Nonrenewal with no refund.
(C) All premiums will be refunded since the insurer is canceling.
(D) Cancellation with unearned premium returned on short rate basis. - ANS (B) Nonrenewal
with no refund.
In order to collect, insurable interest in Property and Casualty Insurance must exist:
(A) At the time the application is made.
(B) At the time the loss occurs.
(C) At the time of the application and at the time of the loss.
(D) Continuously throughout the policy period. - ANS (B) At the time the loss occurs.
Some teenagers decided it would be fun to sneak into the zoo at night and release some
animals. To their dismay they discover the cage they just opened was not the monkey cage but
the gorilla cage. After the gorilla chases them for several miles it decides to roam the
neighborhood. What kind of liability does the zoo have, if any?
(A) Absolute Liability.
(B) Comparative Liability.
(C) Vicarious Liability.
(D) Contributory Liability. - ANS (A) Absolute Liability.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, A fire bums a tire store. Under a property contract insuring against fire losses, the loss of
income resulting from the charred inventory would represent a/an:
(A) Direct loss
(B) Indirect loss
(C) Physical loss
(D) Fair Market loss - ANS (B) Indirect loss
All the following are examples of managing risk EXCEPT:
(A) The insured does not own a vehicle
(B) A corperation has decided to set aside a portion of its profits to pay for its own losses.
(C) The installation of a sprinkler system throughout the building
(D) A company uses the Law of Large Numbers to carefully invest in the stock market -
ANS (D) A company uses the Law of Large Numbers to carefully invest in the stock market
Which of the following policy conditions is designed to encourage you to purchase adequate
insurance protection on your property?
(A) Indemnification
(B) Subrogation
(C) Coinsurance
(D) Insurable interest - ANS (C) Coinsurance
14. Which of the following is true about liability insurance?
(A) Negligence is based upon the reasonable person
(B) A settlement is determined by a judge
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
