MAINE PROPERTY AND CASUALTY
INSURANCE EXAM PRACTICE TEST
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2025
1. What type of insurance policy covers damage to the insured’s vehicle
caused by a collision with another object?
A) Comprehensive
B) Liability
C) Collision
D) Medical Payments
Collision coverage pays for damage to the insured’s vehicle resulting from
a collision with another vehicle or object.
,2. In Maine, what is the minimum liability coverage required for bodily
injury per person in an auto insurance policy?
A) $10,000
B) $25,000
C) $50,000
D) $100,000
The state minimum liability coverage for bodily injury per person is
$25,000 to cover injuries caused to others.
3. Which of the following is NOT covered under a typical homeowners
insurance policy?
A) Fire damage
B) Theft
C) Flood damage
D) Earthquake damage
Flood and earthquake damages are usually excluded and require separate
endorsements or policies.
4. What does the term “deductible” mean in an insurance policy?
A) The total premium paid annually
B) The amount the insured pays before the insurer pays
, C) The policy limit
D) The total amount payable by the insurer
Deductible is the out-of-pocket amount the insured must pay before
insurance benefits apply.
5. What type of policy provides coverage for property damage and
bodily injury caused by the insured to others?
A) Comprehensive
B) Collision
C) Liability
D) Medical Payments
Liability insurance protects the insured against claims for bodily injury and
property damage to others.
6. What does “actual cash value” (ACV) mean?
A) Replacement cost minus depreciation
B) Replacement cost without depreciation
C) Replacement cost minus depreciation
D) Market value plus depreciation
Actual cash value equals replacement cost less depreciation for wear and
tear.
INSURANCE EXAM PRACTICE TEST
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2025
1. What type of insurance policy covers damage to the insured’s vehicle
caused by a collision with another object?
A) Comprehensive
B) Liability
C) Collision
D) Medical Payments
Collision coverage pays for damage to the insured’s vehicle resulting from
a collision with another vehicle or object.
,2. In Maine, what is the minimum liability coverage required for bodily
injury per person in an auto insurance policy?
A) $10,000
B) $25,000
C) $50,000
D) $100,000
The state minimum liability coverage for bodily injury per person is
$25,000 to cover injuries caused to others.
3. Which of the following is NOT covered under a typical homeowners
insurance policy?
A) Fire damage
B) Theft
C) Flood damage
D) Earthquake damage
Flood and earthquake damages are usually excluded and require separate
endorsements or policies.
4. What does the term “deductible” mean in an insurance policy?
A) The total premium paid annually
B) The amount the insured pays before the insurer pays
, C) The policy limit
D) The total amount payable by the insurer
Deductible is the out-of-pocket amount the insured must pay before
insurance benefits apply.
5. What type of policy provides coverage for property damage and
bodily injury caused by the insured to others?
A) Comprehensive
B) Collision
C) Liability
D) Medical Payments
Liability insurance protects the insured against claims for bodily injury and
property damage to others.
6. What does “actual cash value” (ACV) mean?
A) Replacement cost minus depreciation
B) Replacement cost without depreciation
C) Replacement cost minus depreciation
D) Market value plus depreciation
Actual cash value equals replacement cost less depreciation for wear and
tear.
