PSI PROPERTY AND CASUALTY ACTUAL
EXAM NEW VERSION FOR CURRENT YEAR
2025/2026
Which one of the following covers a carrier for liability for loss to cargo while it is
being transported in a truck? - ANSWER>>Motor Truck Cargo Policy
In a monopolistic state, an employer purchases Workers Compensation insurance
from - ANSWER>>a state fund
The insured has two separate Dwelling policies that cover the same property:
Policy A for 30k and Policy B for 60k. The insured has a 12k loss. If both policies
use the pro rata method to handle other insurance, how much will Policy B pay
for this loss? - ANSWER>>8k
Which one of the following lists all the required elements for establishing a charge
of negligence? - ANSWER>>legal duty owed, breach of legal duty owed, proximate
cause, damages In Liability policies, Supplementary Payments are -
ANSWER>>payable in addition to the policy limit of liability
Carl's home sustains 50k damage in an electrical fire. The home is insured under a
Homeowners policy for 75k. At the time of the loss, the homes replacement cost
is 125k. How much will Carl's homeowners policy pay for his loss? -
ANSWER>>37500
Which Homeowners endoresements is used to schedule separate coverage for
one or more ofnine categories of personal property? - ANSWER>>Scheduled
Personal Property
The insured has a $1,000,000 Personal Umbrella policy with a retention limit of
$1,000. The insured suffers a $15,000 loss that is excluded by the underlying
,policy, but not the Umbrella. How much of this loss would be paid under the
umbrella? - ANSWER>>14000
Which of the following would be covered under the building coverage of
the Building and Personal Property coverage form? a. land b. indoor
furniture
c. fixtures
d. inventory - ANSWER>>c
All of the following reduce the general aggregate limit in the CGL Except the a.
medical expense limit
b. personal and advertising injury limit
c. per occurrence limit
d. products-completed operations limit - ANSWER>>d
The Physical Damage section of the Personal Auto policy excludes -
ANSWER>>mechanical breakdown
The insured has a Personal Auto policy with all cars insured by one company. He
sells one of the cars and buys a new one to replace it. Must the insured take any
action for the Liability portion of his current policy to apply to the replacement
vehicle? - ANSWER>>No, Liability coverage for a replacement vehicle is automatic.
Under the Business Auto coverage form, the insureds liability arising out of which
of the following situations would be covered?
a. bodily injury due to the insureds operation of mobile equipment.
b. bodily injury resulting from loading or unloading a covered auto.
c. damage to property in the insureds custody.
d. injury to an employee of the insured while the employee is working for the
insured. - ANSWER>>b
Under the Commercial Property coverage part, the causes of loss- broad form
insures against - ANSWER>>the perils in the cause of loss- basic form and
additional perils
,What is a correct definition of coinsurance? - ANSWER>>A requirement that the
insured carry insurance equal to a specified percentage of the propertys value to
qualify for replacement cost coverage under the policy.
Which one of the following statements concerning the Farm coverage part is
NOT covered? a. it provides both property and liability insurance.
b. it covers the farmers business and personal loss exposures.
c. it can be included in the Commercial Package Policy.
d. it covers the farmers growing crops - ANSWER>>d.
Which Commercial property coverage form covers damage to the property of
others in the insureds care, custody or control for which the insured is legally
liable? - ANSWER>>Legal Liability coverage form
Which of the following losses would be paid under the Business Auto coverage
forms Comprehensive coverage?
a. a covered auto was stolen and never recovered
b. the grillwork on a covered auto gradually corroded due to continuous exposure
to salt air
c. a covered auto was damaged when it was hit by a car that ran a stop sign.
d. a covered auto skidded on icy pavement and overturned. - ANSWER>>a
The owner of a parking lot wants coverage for her liability for damage to vehicles
left in her custody. She needs - ANSWER>>garagekeepers coverage
The Causes of Loss- Special form of the commercial property coverage part
insures against - ANSWER>>all risks of direct physical loss unless specifically
excluded.
Nicole has a Personal Auto policy with limits of 10/20/10 for Liability coverage.
She causes an accident that results in $12,000 bodily injury damages to the other
driver and $5,000 in property damage to the other driver's car. How much would
Nicole's policy pay for both the BI and PD losses? - ANSWER>>15k
, Under the Workers Compensation system, who is responsible for the expenses
resulting from work-related injuries and occupational diseases? - ANSWER>>the
employer,
Under the claims-made CGL, the supplemental extended reporting period
provides - ANSWER>>an unlimited extension for making claims for losses that
occurred during the policy period, but the insured must pay an additional
premium
A basic Dwelling policy automatically provides coverage against fire, lightning and
- ANSWER>>internal explosion
An insured who needs coverage for medical instruments while they are on and off
the premises could obtain it by purchasing the - ANSWER>>physicians and
surgeons equipment coverage form
Widget Enterprises wants property insurance for a new warehouse it is building.
Widget also wants the policy's limit of insurance to gradually increase as the value
of the building under constuction increases. Which Commercial Property coverage
form would best fit Widget's needs? - ANSWER>>Builders Risk Reporting form
When applying for Homeowners insurance, Mr. Applbee tells his agent that the
home is used strictly as a residence. Actually, he manufactures fireworks in the
basement of the home. What will happen if the insurance company discovers Mr.
Applebee's misrepresentation after the policy is issued? - ANSWER>>It will void
the policy because Mr. Applebee misrepresented a material fact
the one basic characteristic of any type of insurance is that the insured is returned
to the same
status that existed prior to the loss, but without a chance for gain or profit -
ANSWER>>true
which of the following coverages does an open peril policy provide? -
ANSWER>>perils other
than those specifically named as being excluded
EXAM NEW VERSION FOR CURRENT YEAR
2025/2026
Which one of the following covers a carrier for liability for loss to cargo while it is
being transported in a truck? - ANSWER>>Motor Truck Cargo Policy
In a monopolistic state, an employer purchases Workers Compensation insurance
from - ANSWER>>a state fund
The insured has two separate Dwelling policies that cover the same property:
Policy A for 30k and Policy B for 60k. The insured has a 12k loss. If both policies
use the pro rata method to handle other insurance, how much will Policy B pay
for this loss? - ANSWER>>8k
Which one of the following lists all the required elements for establishing a charge
of negligence? - ANSWER>>legal duty owed, breach of legal duty owed, proximate
cause, damages In Liability policies, Supplementary Payments are -
ANSWER>>payable in addition to the policy limit of liability
Carl's home sustains 50k damage in an electrical fire. The home is insured under a
Homeowners policy for 75k. At the time of the loss, the homes replacement cost
is 125k. How much will Carl's homeowners policy pay for his loss? -
ANSWER>>37500
Which Homeowners endoresements is used to schedule separate coverage for
one or more ofnine categories of personal property? - ANSWER>>Scheduled
Personal Property
The insured has a $1,000,000 Personal Umbrella policy with a retention limit of
$1,000. The insured suffers a $15,000 loss that is excluded by the underlying
,policy, but not the Umbrella. How much of this loss would be paid under the
umbrella? - ANSWER>>14000
Which of the following would be covered under the building coverage of
the Building and Personal Property coverage form? a. land b. indoor
furniture
c. fixtures
d. inventory - ANSWER>>c
All of the following reduce the general aggregate limit in the CGL Except the a.
medical expense limit
b. personal and advertising injury limit
c. per occurrence limit
d. products-completed operations limit - ANSWER>>d
The Physical Damage section of the Personal Auto policy excludes -
ANSWER>>mechanical breakdown
The insured has a Personal Auto policy with all cars insured by one company. He
sells one of the cars and buys a new one to replace it. Must the insured take any
action for the Liability portion of his current policy to apply to the replacement
vehicle? - ANSWER>>No, Liability coverage for a replacement vehicle is automatic.
Under the Business Auto coverage form, the insureds liability arising out of which
of the following situations would be covered?
a. bodily injury due to the insureds operation of mobile equipment.
b. bodily injury resulting from loading or unloading a covered auto.
c. damage to property in the insureds custody.
d. injury to an employee of the insured while the employee is working for the
insured. - ANSWER>>b
Under the Commercial Property coverage part, the causes of loss- broad form
insures against - ANSWER>>the perils in the cause of loss- basic form and
additional perils
,What is a correct definition of coinsurance? - ANSWER>>A requirement that the
insured carry insurance equal to a specified percentage of the propertys value to
qualify for replacement cost coverage under the policy.
Which one of the following statements concerning the Farm coverage part is
NOT covered? a. it provides both property and liability insurance.
b. it covers the farmers business and personal loss exposures.
c. it can be included in the Commercial Package Policy.
d. it covers the farmers growing crops - ANSWER>>d.
Which Commercial property coverage form covers damage to the property of
others in the insureds care, custody or control for which the insured is legally
liable? - ANSWER>>Legal Liability coverage form
Which of the following losses would be paid under the Business Auto coverage
forms Comprehensive coverage?
a. a covered auto was stolen and never recovered
b. the grillwork on a covered auto gradually corroded due to continuous exposure
to salt air
c. a covered auto was damaged when it was hit by a car that ran a stop sign.
d. a covered auto skidded on icy pavement and overturned. - ANSWER>>a
The owner of a parking lot wants coverage for her liability for damage to vehicles
left in her custody. She needs - ANSWER>>garagekeepers coverage
The Causes of Loss- Special form of the commercial property coverage part
insures against - ANSWER>>all risks of direct physical loss unless specifically
excluded.
Nicole has a Personal Auto policy with limits of 10/20/10 for Liability coverage.
She causes an accident that results in $12,000 bodily injury damages to the other
driver and $5,000 in property damage to the other driver's car. How much would
Nicole's policy pay for both the BI and PD losses? - ANSWER>>15k
, Under the Workers Compensation system, who is responsible for the expenses
resulting from work-related injuries and occupational diseases? - ANSWER>>the
employer,
Under the claims-made CGL, the supplemental extended reporting period
provides - ANSWER>>an unlimited extension for making claims for losses that
occurred during the policy period, but the insured must pay an additional
premium
A basic Dwelling policy automatically provides coverage against fire, lightning and
- ANSWER>>internal explosion
An insured who needs coverage for medical instruments while they are on and off
the premises could obtain it by purchasing the - ANSWER>>physicians and
surgeons equipment coverage form
Widget Enterprises wants property insurance for a new warehouse it is building.
Widget also wants the policy's limit of insurance to gradually increase as the value
of the building under constuction increases. Which Commercial Property coverage
form would best fit Widget's needs? - ANSWER>>Builders Risk Reporting form
When applying for Homeowners insurance, Mr. Applbee tells his agent that the
home is used strictly as a residence. Actually, he manufactures fireworks in the
basement of the home. What will happen if the insurance company discovers Mr.
Applebee's misrepresentation after the policy is issued? - ANSWER>>It will void
the policy because Mr. Applebee misrepresented a material fact
the one basic characteristic of any type of insurance is that the insured is returned
to the same
status that existed prior to the loss, but without a chance for gain or profit -
ANSWER>>true
which of the following coverages does an open peril policy provide? -
ANSWER>>perils other
than those specifically named as being excluded
