PROPERTY AND CASUALTY EXAM SCRIPT
2026 COMPLETE ANSWERS VERIFIED
◉ A common exclusion found under physical damage to your auto
includes Answer: Mechanical breakdown.
◉ Which of the following is true regarding a risk retention group?
Answer: It is a liability insurance company owned by its members.
◉ Which of the following best describes a misrepresentation?
Answer: Issuing sales material with exaggerated statements about
policy benefits
◉ A builder's risk form is most often written as which of the
following? Answer: Completed value form
◉ An insured has a liability policy that sets the amount for all claims
that arise from a single incident at $50,000. Which type of limit of
liability does this insured's policy have? Answer: Per occurrence
◉ Which of the following is an example of a protective safeguard in a
businessowners policy? Answer: Automatic sprinkler system
,◉ If a licensee wants to transact insurance under a different name
than that listed on his or her producer's license, which of the
following must occur? Answer: The change must be reported to the
Commissioner.
◉ If more than one person has an insurable interest in the property
covered under a dwelling policy, Answer: The insurer will be liable
for only the insured's interest in the damaged property.
◉ Bob's home is insured for $100,000 under a dwelling policy.
Yesterday his home suffered $20,000 damage from a fire. Today the
home was struck by lightning, starting another fire that completely
destroyed the structure. Bob's policy will pay Answer: $100,000.
◉ An automobile that is owned by a nontraditional household, not
consisting of a husband and wife, may be insured under a personal
auto policy if Answer: A joint ownership coverage endorsement is
added.
◉ Which of the following is defined as a covered cause of loss in
businessowners property coverage? Answer: Leakage from fire-
extinguishing equipment
◉ The insured's mother-in-law broke her leg falling down the front
steps of the insured's premises. The insured's homeowners medical
,payments coverage will Answer: Apply to injuries of any guests or
visitors.
◉ All of the following are exclusions under farm property coverage
EXCEPT Answer: Loss of use.
◉ Coverage for medical payments under a personal auto policy
applies to expenses following a covered accident that are incurred
and services rendered within what maximum time period? Answer:
3 years
◉ Which of the following is an example of an unfair claims
settlement practice? Answer: Failure to promptly settle a claim
when liability has been clearly established
◉ Which of the following definitions best defines the term
"accident"? Answer: A sudden, unplanned and unexpected event, not
under the control of the insured, resulting in injury or damage
neither expected nor intended
◉ An insured's accounts receivable records have been damaged. The
loss may be covered with Answer: The accounts receivable coverage
form.
, ◉ Under the workers compensation system, who is responsible for
the expenses resulting from work-related injuries and occupational
diseases? Answer: The employer, regardless of whether it was at
fault for the injury or disease
◉ A person applying for a manager or exclusive general agent
license must meet all of the following criteria EXCEPT Answer: Be
responsible for at least 25% of total commissions collected by the
office that he or she manages.
◉ When a vehicle travels from one state to another, what happens to
the limits of policy liability in a personal auto policy? Answer: They
do not change.
◉ In a personal umbrella policy, the amount paid by the insured for
certain losses not covered under the primary coverage is called
Answer: Self-insured retention.
◉ Which of the following circumstances would be EXCLUDED under
medical payments coverage of a personal auto policy? Answer: The
insured is injured while driving his motorcycle on his resident
premises.
◉ Which of the following is NOT an essential element of an
insurance contract? Answer: Counteroffer
2026 COMPLETE ANSWERS VERIFIED
◉ A common exclusion found under physical damage to your auto
includes Answer: Mechanical breakdown.
◉ Which of the following is true regarding a risk retention group?
Answer: It is a liability insurance company owned by its members.
◉ Which of the following best describes a misrepresentation?
Answer: Issuing sales material with exaggerated statements about
policy benefits
◉ A builder's risk form is most often written as which of the
following? Answer: Completed value form
◉ An insured has a liability policy that sets the amount for all claims
that arise from a single incident at $50,000. Which type of limit of
liability does this insured's policy have? Answer: Per occurrence
◉ Which of the following is an example of a protective safeguard in a
businessowners policy? Answer: Automatic sprinkler system
,◉ If a licensee wants to transact insurance under a different name
than that listed on his or her producer's license, which of the
following must occur? Answer: The change must be reported to the
Commissioner.
◉ If more than one person has an insurable interest in the property
covered under a dwelling policy, Answer: The insurer will be liable
for only the insured's interest in the damaged property.
◉ Bob's home is insured for $100,000 under a dwelling policy.
Yesterday his home suffered $20,000 damage from a fire. Today the
home was struck by lightning, starting another fire that completely
destroyed the structure. Bob's policy will pay Answer: $100,000.
◉ An automobile that is owned by a nontraditional household, not
consisting of a husband and wife, may be insured under a personal
auto policy if Answer: A joint ownership coverage endorsement is
added.
◉ Which of the following is defined as a covered cause of loss in
businessowners property coverage? Answer: Leakage from fire-
extinguishing equipment
◉ The insured's mother-in-law broke her leg falling down the front
steps of the insured's premises. The insured's homeowners medical
,payments coverage will Answer: Apply to injuries of any guests or
visitors.
◉ All of the following are exclusions under farm property coverage
EXCEPT Answer: Loss of use.
◉ Coverage for medical payments under a personal auto policy
applies to expenses following a covered accident that are incurred
and services rendered within what maximum time period? Answer:
3 years
◉ Which of the following is an example of an unfair claims
settlement practice? Answer: Failure to promptly settle a claim
when liability has been clearly established
◉ Which of the following definitions best defines the term
"accident"? Answer: A sudden, unplanned and unexpected event, not
under the control of the insured, resulting in injury or damage
neither expected nor intended
◉ An insured's accounts receivable records have been damaged. The
loss may be covered with Answer: The accounts receivable coverage
form.
, ◉ Under the workers compensation system, who is responsible for
the expenses resulting from work-related injuries and occupational
diseases? Answer: The employer, regardless of whether it was at
fault for the injury or disease
◉ A person applying for a manager or exclusive general agent
license must meet all of the following criteria EXCEPT Answer: Be
responsible for at least 25% of total commissions collected by the
office that he or she manages.
◉ When a vehicle travels from one state to another, what happens to
the limits of policy liability in a personal auto policy? Answer: They
do not change.
◉ In a personal umbrella policy, the amount paid by the insured for
certain losses not covered under the primary coverage is called
Answer: Self-insured retention.
◉ Which of the following circumstances would be EXCLUDED under
medical payments coverage of a personal auto policy? Answer: The
insured is injured while driving his motorcycle on his resident
premises.
◉ Which of the following is NOT an essential element of an
insurance contract? Answer: Counteroffer
