Property & Casualty Insurance License
Exam Test Exam Questions and Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A.
1. Which type of insurance covers damage to buildings and
personal property from fire, theft, or other perils?
A. Property insurance
B. Liability insurance
C. Health insurance
D. Life insurance
Correct Answer: A
Rationale:
Property insurance protects physical assets from covered losses.
2. Which policy covers legal responsibility for bodily injury or
property damage to others?
A. Liability insurance
B. Property insurance
C. Health insurance
D. Life insurance
Correct Answer: A
Rationale:
Liability insurance pays damages for which the insured is legally
responsible.
3. In homeowners insurance, which peril is typically covered?
,A. Fire
B. Flood
C. Earthquake
D. War
Correct Answer: A
Rationale:
Fire is a standard named peril in most homeowners policies; others
require additional endorsements.
4. Which property insurance coverage protects against theft of
personal property?
A. Contents coverage
B. Dwelling coverage
C. Liability coverage
D. Flood insurance
Correct Answer: A
Rationale:
Covers personal belongings inside or sometimes outside the home.
5. Which type of insurance protects a business against liability for
employee injuries?
A. Workers’ compensation insurance
B. Property insurance
C. Auto liability
D. Health insurance
Correct Answer: A
Rationale:
Mandatory in NY for most employers; covers medical costs and lost
wages for work-related injuries.
6. In auto insurance, liability coverage pays for:
A. Bodily injury and property damage caused to others
B. Damage to the insured’s car
,C. Medical bills for the insured only
D. Premiums
Correct Answer: A
Rationale:
Mandatory in NY; protects against claims when the insured is at
fault.
7. Which type of auto coverage pays for repair to your own
vehicle regardless of fault?
A. Collision insurance
B. Liability insurance
C. Comprehensive insurance
D. Uninsured motorist coverage
Correct Answer: A
Rationale:
Collision covers damage from collision with another vehicle or
object.
8. Which property insurance protects against natural disasters
like hurricanes or windstorm?
A. Named peril coverage with windstorm
B. Standard fire policy only
C. Liability insurance
D. Workers’ compensation
Correct Answer: A
Rationale:
Named peril coverage can include windstorm, hail, and other
specific risks.
9. Which coverage protects against non-collision damage like fire,
theft, or vandalism?
A. Comprehensive auto insurance
B. Collision
, C. Liability
D. Workers’ compensation
Correct Answer: A
Rationale:
Also called “other than collision” coverage; reimburses for covered
non-collision events.
10. In property insurance, “actual cash value” (ACV) means:
A. Replacement cost minus depreciation
B. Full replacement cost
C. Face value of policy
D. Premium amount
Correct Answer: A
Rationale:
ACV pays the depreciated value of damaged property at the time of
loss.
11. “Replacement cost” coverage pays:
A. Cost to replace damaged property with no deduction for
depreciation
B. Depreciated value only
C. Premium amount
D. Liability claims
Correct Answer: A
Rationale:
Provides full repair or replacement cost, encouraging full
restoration.
12. In commercial property insurance, a “business interruption”
policy covers:
A. Lost income due to property damage
B. Employee injuries
C. Auto accidents
D. Liability for customers
Exam Test Exam Questions and Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A.
1. Which type of insurance covers damage to buildings and
personal property from fire, theft, or other perils?
A. Property insurance
B. Liability insurance
C. Health insurance
D. Life insurance
Correct Answer: A
Rationale:
Property insurance protects physical assets from covered losses.
2. Which policy covers legal responsibility for bodily injury or
property damage to others?
A. Liability insurance
B. Property insurance
C. Health insurance
D. Life insurance
Correct Answer: A
Rationale:
Liability insurance pays damages for which the insured is legally
responsible.
3. In homeowners insurance, which peril is typically covered?
,A. Fire
B. Flood
C. Earthquake
D. War
Correct Answer: A
Rationale:
Fire is a standard named peril in most homeowners policies; others
require additional endorsements.
4. Which property insurance coverage protects against theft of
personal property?
A. Contents coverage
B. Dwelling coverage
C. Liability coverage
D. Flood insurance
Correct Answer: A
Rationale:
Covers personal belongings inside or sometimes outside the home.
5. Which type of insurance protects a business against liability for
employee injuries?
A. Workers’ compensation insurance
B. Property insurance
C. Auto liability
D. Health insurance
Correct Answer: A
Rationale:
Mandatory in NY for most employers; covers medical costs and lost
wages for work-related injuries.
6. In auto insurance, liability coverage pays for:
A. Bodily injury and property damage caused to others
B. Damage to the insured’s car
,C. Medical bills for the insured only
D. Premiums
Correct Answer: A
Rationale:
Mandatory in NY; protects against claims when the insured is at
fault.
7. Which type of auto coverage pays for repair to your own
vehicle regardless of fault?
A. Collision insurance
B. Liability insurance
C. Comprehensive insurance
D. Uninsured motorist coverage
Correct Answer: A
Rationale:
Collision covers damage from collision with another vehicle or
object.
8. Which property insurance protects against natural disasters
like hurricanes or windstorm?
A. Named peril coverage with windstorm
B. Standard fire policy only
C. Liability insurance
D. Workers’ compensation
Correct Answer: A
Rationale:
Named peril coverage can include windstorm, hail, and other
specific risks.
9. Which coverage protects against non-collision damage like fire,
theft, or vandalism?
A. Comprehensive auto insurance
B. Collision
, C. Liability
D. Workers’ compensation
Correct Answer: A
Rationale:
Also called “other than collision” coverage; reimburses for covered
non-collision events.
10. In property insurance, “actual cash value” (ACV) means:
A. Replacement cost minus depreciation
B. Full replacement cost
C. Face value of policy
D. Premium amount
Correct Answer: A
Rationale:
ACV pays the depreciated value of damaged property at the time of
loss.
11. “Replacement cost” coverage pays:
A. Cost to replace damaged property with no deduction for
depreciation
B. Depreciated value only
C. Premium amount
D. Liability claims
Correct Answer: A
Rationale:
Provides full repair or replacement cost, encouraging full
restoration.
12. In commercial property insurance, a “business interruption”
policy covers:
A. Lost income due to property damage
B. Employee injuries
C. Auto accidents
D. Liability for customers
