Property and Casualty Insurance Practice test
questions PREP Exam 350 Questions with 100% Correct
Answers | Latest Version (2026/2027) Expert Verified
OVERVIEW
This exam covers homeowners insurance and workers’ compensation, focusing on how
coverage applies, what is excluded, and how claims are paid in real-life situations.
It tests your understanding of policy limits, vacancy vs. unoccupancy, different homeowners
forms (HO-2, HO-3, HO-4, HO-8), and coverage sections like dwelling and other
structures. You’ll also apply knowledge to claim calculations and coverage decisions.
In addition, it covers workers’ compensation, including employee benefits, disability types,
employer liability, and legal responsibilities, along with topics like umbrella policies,
professional liability, surety bonds, and excess coverage—helping you understand how
protection works for both individuals and businesses.
Under a Homeowners Policy, the limit per person for medical payments is $1,000 and the aggregate
per occurrence limit is $25,000. Three persons incur medical expenses of $800, $500 and $1,250. The
insurer will pay a total of:
a. $1,000.
b. $2,300.
c. $2,550.
d. $3,000 - correct answer -$2,300
The insured bought an unfurnished house and did not occupy it for 90 days. The house was damaged
by an attempted theft. Why could the insurer deny the claim?
a. The house was unoccupied.
b. The "insured" failed to move in within 60 days.
c. There was misrepresentation on the application concerning the occupancy. d. The house was vacant -
correct answer -The house was vacant
All of the following are true under the Dwelling Broad Form, EXCEPT:
a. Mobile homes and farms are eligible.
b. The dwelling is covered by the broad perils.
,c. Incidental business occupancies are allowed.
d. The dwelling is covered on a replacement cost basis. - correct answer -Mobile homes and farms are
eligible.
Which is true of the special coverage form under the DP-3?
a. Covers all perils, except for the named exclusions.
b. Covers replacement cost on personal property.
c. Qualifies for mobile home coverage.
d. Covers on an ACV basis for buildings - correct answer -Covers all perils, except for the named
exclusions.
A rabid deer jumps through a window of a home and subsequently causes damage to the insured's
carpet, drapes, a very valuable vase and an irreplaceable collection of antiques dentures valued at
$45,00 according to an Antique Road show appraisal! Which of the following homeowners forms
would not cover the window?
a. HO 00 08.
b. HO 00 05.
c. HO 00 04.
d. HO 00 02 - correct answer -HO 00 04
In a Mobile Homeowners Policy, where would the insured's detached garage be covered?
a. Any "Other Structures" would have to be added by endorsement.
b. Under Coverage B of the policy.
c. Coverage A covers all structures on the insured's premises.
d. Under Sec I - Coverage - correct answer -Under Coverage B of the policy.
Which of the following would an HO-8 be used for?
a. An insured that owns an older home.
b. An insured that owns rental property.
c. A duplex, provided it's occupied by the insured.
,d. A condominium unit. - correct answer -d. A condominium unit.
What is the primary objective of Worker's Compensation?
a. To provide the payment of benefits to employees for injuries arising out of their employment.
b. To provide the payment of benefits to employees temporarily unemployed.
c. To provide accident insurance for employees both on and off the job.
d. To improve employees working conditions. - correct answer -To provide the payment of benefits to
employees for injuries arising out of their employment.
Employer's Liability, in Worker's Compensation Insurance, provides for:
a. Statutory claims made against the employer by the employee.
b. Common law claims made against the employer by the employee.
c. Claims in excess of the basic policy limits.
d. Claims for property damage incurred during the course of employment - correct answer -Common
law claims made against the employer by the employee.
Worker's Compensation benefits are payable:
a. Only if the employee is negligent.
b. Only if the employer is negligent.
c. Only if the non-exempt employer carries Worker's Compensation.
d. Regardless of the employee's negligence - correct answer -Regardless of the employee's negligence
Classes of employment covered under Worker's Compensation laws include:
a. Agricultural workers.
b. Real estate brokers.
c. Office workers.
d. An employer with a gross annual payroll less than $20,000 - correct answer -office workers
Which best describes the legal relationship between a contractor and a subcontractor?
, a. The contractor has no obligation to provide Worker's Compensation coverage for the employees of
subcontractors.
b. The contractor may be responsible to pay Worker's Compensation benefits to the employees of a
subcontractor, if the subcontractor doesn't carry proper coverage
. c. The contractor is expected to pay for Worker's Compensation coverage for employees of
subcontractors.
d. The contractor is required to provide Worker's Compensation coverage for employees of
subcontractors. - correct answer -The contractor may be responsible to pay Worker's Compensation
benefits to the employees of a subcontractor, if the subcontractor doesn't carry proper coverage
The limit for Worker's Compensation medical expense coverage under Part I of the Worker's
Compensation Policy is:
a. $100,000.
b. $300,000.
c. $500,000.
d. there is no limit. - correct answer -there is no limit
An employee who is unable to work while recovering from injury, but is expected to fully recover, has a:
a. Permanent partial disability.
b. Partial total disability.
c. Temporary partial disability.
d. Temporary total disability - correct answer -Temporary total disability
What is the minimum limit of liability under Part II of Worker's Compensation? a. $250,000. b. $100,000.
c. $50,000. d. $10,000 - correct answer -$100,000
Which is not covered under Worker's Compensation?
a. Loss of income.
b. Punitive and exemplary damages.
c. Medical expenses.
d. Death benefit. - correct answer -Punitive and exemplary damages
questions PREP Exam 350 Questions with 100% Correct
Answers | Latest Version (2026/2027) Expert Verified
OVERVIEW
This exam covers homeowners insurance and workers’ compensation, focusing on how
coverage applies, what is excluded, and how claims are paid in real-life situations.
It tests your understanding of policy limits, vacancy vs. unoccupancy, different homeowners
forms (HO-2, HO-3, HO-4, HO-8), and coverage sections like dwelling and other
structures. You’ll also apply knowledge to claim calculations and coverage decisions.
In addition, it covers workers’ compensation, including employee benefits, disability types,
employer liability, and legal responsibilities, along with topics like umbrella policies,
professional liability, surety bonds, and excess coverage—helping you understand how
protection works for both individuals and businesses.
Under a Homeowners Policy, the limit per person for medical payments is $1,000 and the aggregate
per occurrence limit is $25,000. Three persons incur medical expenses of $800, $500 and $1,250. The
insurer will pay a total of:
a. $1,000.
b. $2,300.
c. $2,550.
d. $3,000 - correct answer -$2,300
The insured bought an unfurnished house and did not occupy it for 90 days. The house was damaged
by an attempted theft. Why could the insurer deny the claim?
a. The house was unoccupied.
b. The "insured" failed to move in within 60 days.
c. There was misrepresentation on the application concerning the occupancy. d. The house was vacant -
correct answer -The house was vacant
All of the following are true under the Dwelling Broad Form, EXCEPT:
a. Mobile homes and farms are eligible.
b. The dwelling is covered by the broad perils.
,c. Incidental business occupancies are allowed.
d. The dwelling is covered on a replacement cost basis. - correct answer -Mobile homes and farms are
eligible.
Which is true of the special coverage form under the DP-3?
a. Covers all perils, except for the named exclusions.
b. Covers replacement cost on personal property.
c. Qualifies for mobile home coverage.
d. Covers on an ACV basis for buildings - correct answer -Covers all perils, except for the named
exclusions.
A rabid deer jumps through a window of a home and subsequently causes damage to the insured's
carpet, drapes, a very valuable vase and an irreplaceable collection of antiques dentures valued at
$45,00 according to an Antique Road show appraisal! Which of the following homeowners forms
would not cover the window?
a. HO 00 08.
b. HO 00 05.
c. HO 00 04.
d. HO 00 02 - correct answer -HO 00 04
In a Mobile Homeowners Policy, where would the insured's detached garage be covered?
a. Any "Other Structures" would have to be added by endorsement.
b. Under Coverage B of the policy.
c. Coverage A covers all structures on the insured's premises.
d. Under Sec I - Coverage - correct answer -Under Coverage B of the policy.
Which of the following would an HO-8 be used for?
a. An insured that owns an older home.
b. An insured that owns rental property.
c. A duplex, provided it's occupied by the insured.
,d. A condominium unit. - correct answer -d. A condominium unit.
What is the primary objective of Worker's Compensation?
a. To provide the payment of benefits to employees for injuries arising out of their employment.
b. To provide the payment of benefits to employees temporarily unemployed.
c. To provide accident insurance for employees both on and off the job.
d. To improve employees working conditions. - correct answer -To provide the payment of benefits to
employees for injuries arising out of their employment.
Employer's Liability, in Worker's Compensation Insurance, provides for:
a. Statutory claims made against the employer by the employee.
b. Common law claims made against the employer by the employee.
c. Claims in excess of the basic policy limits.
d. Claims for property damage incurred during the course of employment - correct answer -Common
law claims made against the employer by the employee.
Worker's Compensation benefits are payable:
a. Only if the employee is negligent.
b. Only if the employer is negligent.
c. Only if the non-exempt employer carries Worker's Compensation.
d. Regardless of the employee's negligence - correct answer -Regardless of the employee's negligence
Classes of employment covered under Worker's Compensation laws include:
a. Agricultural workers.
b. Real estate brokers.
c. Office workers.
d. An employer with a gross annual payroll less than $20,000 - correct answer -office workers
Which best describes the legal relationship between a contractor and a subcontractor?
, a. The contractor has no obligation to provide Worker's Compensation coverage for the employees of
subcontractors.
b. The contractor may be responsible to pay Worker's Compensation benefits to the employees of a
subcontractor, if the subcontractor doesn't carry proper coverage
. c. The contractor is expected to pay for Worker's Compensation coverage for employees of
subcontractors.
d. The contractor is required to provide Worker's Compensation coverage for employees of
subcontractors. - correct answer -The contractor may be responsible to pay Worker's Compensation
benefits to the employees of a subcontractor, if the subcontractor doesn't carry proper coverage
The limit for Worker's Compensation medical expense coverage under Part I of the Worker's
Compensation Policy is:
a. $100,000.
b. $300,000.
c. $500,000.
d. there is no limit. - correct answer -there is no limit
An employee who is unable to work while recovering from injury, but is expected to fully recover, has a:
a. Permanent partial disability.
b. Partial total disability.
c. Temporary partial disability.
d. Temporary total disability - correct answer -Temporary total disability
What is the minimum limit of liability under Part II of Worker's Compensation? a. $250,000. b. $100,000.
c. $50,000. d. $10,000 - correct answer -$100,000
Which is not covered under Worker's Compensation?
a. Loss of income.
b. Punitive and exemplary damages.
c. Medical expenses.
d. Death benefit. - correct answer -Punitive and exemplary damages
