Property and casualty insurance Exam
Questions and Answers Part one 2025/26
Which of the following are the authorities that an agent can hold? - Correct Answers Express and
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
implied
II!
II! Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers Permanent partial disability II! II! II! II! II! II! II!
II! Who is NOT considered an employee in an commercial general liability (CGL) policy? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Temporary worker II!
II! The major portion of the premium of an equipment breakdown policy pays? - Correct Answers For
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! inspections and examinations II! II!
II! An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance policy, how , much should he insure the property for? - Correct Answers 80% of the
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! property's replacement cost or more II! II! II! II!
II! Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! contained in his or her report, the reporting agency must - Correct Answers Respond to the consumer's
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! complaint.
II! All of the following are found in the declarations section of a policy EXCEPT the - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Exclusions.
II! The cost of restoring farm records is an additional coverage offered under a farm policy. How much will
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! the policy pay to restore the records? - Correct Answers Up to $2,000
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Correct Answers Dividends from a mutual insurer.
II! II! II! II! II! II! II! II! II! II!
,II! Which of the following may be covered by electronic data processing coverage form under an inland
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! marine policy? - Correct Answers a) Computer hardware that is specifically scheduled.
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
b) Extra expense the insured incurs to continue the business following a loss.
II! II! II! II! II! II! II! II! II! II! II! II!
c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! The party to a surety or fidelity bond who promises to fulfill the obligation is the - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Principal
II! The transfer of money from inside a banking premises to a person other than a messenger outside those
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! premises or to a place outside those premises is covered under which commercial crime coverage? -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Correct Answers Computer fraud II! II! II! II! II! II! II!
Which of the following would NOT be covered under the liability section of a personal auto policy? -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
Correct Answers Bodily injury is caused by the insured's negligence while driving a three-wheel all-
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
terrain vehicle. II!
II! When a producer holding a certificate or a broker's license has a change in his/her residence or business
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! address, he/she must notify the Department of Insurance and any company for which the producer holds
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! an appointment within - Correct Answers 30 days.
II! II! II! II! II! II! II! II! II! II! II! II!
II! What will happen if a house covered by a standard mortgage clause is a total loss? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! The insurer pays the mortgagee according to the mortgagee's interest in the property.
II! II! II! II! II! II! II! II! II! II! II! II!
II! What is the civil penalty for violating a cease and desist order of the Commissioner? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! $10,000
II! The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! EXCEPT - Correct Answers Business liability. II! II! II! II! II! II! II! II! II! II!
II! If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000,
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! how much will Company A pay on a $24,000 loss? - Correct Answers $8,000
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
, II! The risk management technique that is used to prevent a specific loss by not exposing oneself to that
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! activity is called - Correct Answers Avoidance.II! II! II! II! II! II! II! II! II! II! II!
II! In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! II!Correct Answers The insurer. II! II! II! II! II! II! II!
II! Which of the following entities must approve all continuing education courses in this state? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers The Commissioner II! II! II! II! II! II!
II! An applicant knowingly fails to communicate information that would help an underwriter make a sound
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! decision regarding coverage. This is an example of - Correct Answers Concealment
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! A common exclusion found under physical damage to your auto includes - Correct Answers Mechanical
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! breakdown.
II! Which of the following is true regarding a risk retention group? - Correct Answers It is a liability
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance company owned by its members. II! II! II! II! II!
II! Which of the following best describes a misrepresentation? - Correct Answers Issuing sales material
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! with exaggerated statements about policy benefits
II! II! II! II! II!
II! A builder's risk form is most often written as which of the following? - Correct Answers Completed
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! value form II!
II! An insured has a liability policy that sets the amount for all claims that arise from a single incident at
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! $50,000. Which type of limit of liability does this insured's policy have? - Correct Answers Per
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! occurrence
II! Which of the following is an example of a protective safeguard in a businessowners policy? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers Automatic sprinkler system II! II! II! II! II! II! II!
Questions and Answers Part one 2025/26
Which of the following are the authorities that an agent can hold? - Correct Answers Express and
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
implied
II!
II! Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers Permanent partial disability II! II! II! II! II! II! II!
II! Who is NOT considered an employee in an commercial general liability (CGL) policy? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Temporary worker II!
II! The major portion of the premium of an equipment breakdown policy pays? - Correct Answers For
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! inspections and examinations II! II!
II! An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance policy, how , much should he insure the property for? - Correct Answers 80% of the
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! property's replacement cost or more II! II! II! II!
II! Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! contained in his or her report, the reporting agency must - Correct Answers Respond to the consumer's
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! complaint.
II! All of the following are found in the declarations section of a policy EXCEPT the - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Exclusions.
II! The cost of restoring farm records is an additional coverage offered under a farm policy. How much will
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! the policy pay to restore the records? - Correct Answers Up to $2,000
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Correct Answers Dividends from a mutual insurer.
II! II! II! II! II! II! II! II! II! II!
,II! Which of the following may be covered by electronic data processing coverage form under an inland
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! marine policy? - Correct Answers a) Computer hardware that is specifically scheduled.
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
b) Extra expense the insured incurs to continue the business following a loss.
II! II! II! II! II! II! II! II! II! II! II! II!
c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! The party to a surety or fidelity bond who promises to fulfill the obligation is the - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Principal
II! The transfer of money from inside a banking premises to a person other than a messenger outside those
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! premises or to a place outside those premises is covered under which commercial crime coverage? -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Correct Answers Computer fraud II! II! II! II! II! II! II!
Which of the following would NOT be covered under the liability section of a personal auto policy? -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
Correct Answers Bodily injury is caused by the insured's negligence while driving a three-wheel all-
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
terrain vehicle. II!
II! When a producer holding a certificate or a broker's license has a change in his/her residence or business
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! address, he/she must notify the Department of Insurance and any company for which the producer holds
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! an appointment within - Correct Answers 30 days.
II! II! II! II! II! II! II! II! II! II! II! II!
II! What will happen if a house covered by a standard mortgage clause is a total loss? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! The insurer pays the mortgagee according to the mortgagee's interest in the property.
II! II! II! II! II! II! II! II! II! II! II! II!
II! What is the civil penalty for violating a cease and desist order of the Commissioner? - Correct Answers
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! $10,000
II! The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! EXCEPT - Correct Answers Business liability. II! II! II! II! II! II! II! II! II! II!
II! If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000,
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! how much will Company A pay on a $24,000 loss? - Correct Answers $8,000
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
, II! The risk management technique that is used to prevent a specific loss by not exposing oneself to that
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! activity is called - Correct Answers Avoidance.II! II! II! II! II! II! II! II! II! II! II!
II! In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by -
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! II!Correct Answers The insurer. II! II! II! II! II! II! II!
II! Which of the following entities must approve all continuing education courses in this state? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers The Commissioner II! II! II! II! II! II!
II! An applicant knowingly fails to communicate information that would help an underwriter make a sound
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! decision regarding coverage. This is an example of - Correct Answers Concealment
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! A common exclusion found under physical damage to your auto includes - Correct Answers Mechanical
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! breakdown.
II! Which of the following is true regarding a risk retention group? - Correct Answers It is a liability
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance company owned by its members. II! II! II! II! II!
II! Which of the following best describes a misrepresentation? - Correct Answers Issuing sales material
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! with exaggerated statements about policy benefits
II! II! II! II! II!
II! A builder's risk form is most often written as which of the following? - Correct Answers Completed
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! value form II!
II! An insured has a liability policy that sets the amount for all claims that arise from a single incident at
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! $50,000. Which type of limit of liability does this insured's policy have? - Correct Answers Per
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! occurrence
II! Which of the following is an example of a protective safeguard in a businessowners policy? - Correct
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Answers Automatic sprinkler system II! II! II! II! II! II! II!
