PROPERTY AND CASUALTY INSURANCE
CERTIFICATION EXAM 2026 QUESTIONS
WITH CORRECT ANSWERS
• Real Property. Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
• Insurable Interest. Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged.
Must exist at the time of loss in P&C insurance.
• Elements of Insurable Interest. Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower),
Blood (Family), Business (Business partners over a company).
• Actual Cash Value. Answer: Replacement cost less than
depreciation (RC-Depreciation=Amount Paid). Reinforces the
principal of indemnity.
• Replacement Cost. Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
• Functional Replacement Cost. Answer: Replacing a property with
a more modern and less expensive property.
, • Market Value. Answer: What a willing buyer is willing to pay a
willing seller.
• Agreed Value. Answer: The amount agreed upon by the insured
and insurer. Amount is stated in the policy.
• Stated Amount. Answer: The amount the insurer says for a
particular property. Amount is written in the policy.
• Proximate Cause of Loss. Answer: A loss is covered only if a
covered peril is the proximate cause. Proximate cause is the event
initiating an unbroken chain of events leading to the loss.
• Named Peril Policy. Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
• Theft. Answer: Taking of property.
• Burglary. Answer: Taking of property using forced entry and exit.
• Robbery. Answer: Taking of property using threatening tactics.
• Mysterious Disappearance. Answer: Not knowing, when, where or
how a property was taken. Not covered in most insurance policies.
CERTIFICATION EXAM 2026 QUESTIONS
WITH CORRECT ANSWERS
• Real Property. Answer: Real property includes the building and its
attached components, such as doors, windows, sinks, and toilets.
• Insurable Interest. Answer: Interest someone has in a person or
property that is subject to a financial loss if injured or damaged.
Must exist at the time of loss in P&C insurance.
• Elements of Insurable Interest. Answer: There are 3 elements of
insurable interest: Financial (Mortgage company and borrower),
Blood (Family), Business (Business partners over a company).
• Actual Cash Value. Answer: Replacement cost less than
depreciation (RC-Depreciation=Amount Paid). Reinforces the
principal of indemnity.
• Replacement Cost. Answer: What it cost to replace the property at
today's price without depreciation. Contrary to the principal of
indemnity.
• Functional Replacement Cost. Answer: Replacing a property with
a more modern and less expensive property.
, • Market Value. Answer: What a willing buyer is willing to pay a
willing seller.
• Agreed Value. Answer: The amount agreed upon by the insured
and insurer. Amount is stated in the policy.
• Stated Amount. Answer: The amount the insurer says for a
particular property. Amount is written in the policy.
• Proximate Cause of Loss. Answer: A loss is covered only if a
covered peril is the proximate cause. Proximate cause is the event
initiating an unbroken chain of events leading to the loss.
• Named Peril Policy. Answer: A policy that specifies the perils
covered. If it is not listed, it's not covered.
• Theft. Answer: Taking of property.
• Burglary. Answer: Taking of property using forced entry and exit.
• Robbery. Answer: Taking of property using threatening tactics.
• Mysterious Disappearance. Answer: Not knowing, when, where or
how a property was taken. Not covered in most insurance policies.
