1|Page
PROPERTY AND CASUALTY
INSURANCE EXAM 2026|LATEST
PREP QUESTIONS WITH ANSWERS
AND RATIONALES
Part A - Liability Coverage - correct-answer -Provides payment for Bodily Injury
(BI) & Property Damage (PD) damage resulting from the injured's use of an
automobile for which the insured becomes legally liable.
- Covers Third Party Only
- Pays for both $pecial and General Damages
Loss of Use - correct-answer -The inconvenience caused to an individual for the
inability to use property.
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Underinsured Motorist Coverage (UIM) - correct-answer -Covers the insured
when involved in an accident with a driver who has auto liability insurance, but
the limit of this insurance is insufficient to pay for the insured's damage.
Collision - correct-answer -The upset of a covered auto or its impact with another
motor vehicle .
Comprehensive - correct-answer -Addresses property damage losses to the
insured vehicle involving losses other than collisions.
Examples:
- Contact with birds or animals
- Theft or larceny
- Fire
- Hair, water, or flood
- Vandalism or malicious mischief (VMM)
- Breakage of glass
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Nonowned Auto - correct-answer -Any private passenger vehicle not owned by
the insured being operated by the insured.
Examples:
- Rental Car
- Temporary Substitute
APIP - correct-answer -Additional Personal Injury Protection (optional)
OBEL - correct-answer -Optional Basic Economic Loss
Additional $25,000 to be assigned to any combination of Medical Expenses, Loss
Wages, Rehab.
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Red Lining - correct-answer -No insurer may refuse to issue or renew an auto
policy because of age, sex, race, occupation or principal place of garaging of the
named insured.
Stacking - correct-answer -The practice of adding (stacking) the limits of all
applicable policies to address a given loss.
Flood - correct-answer -A general or temporary condition of partial or complete
inundation of normally dry land areas.
Must affect:
- 2 or more acres
or
- 2 or more properties
PROPERTY AND CASUALTY
INSURANCE EXAM 2026|LATEST
PREP QUESTIONS WITH ANSWERS
AND RATIONALES
Part A - Liability Coverage - correct-answer -Provides payment for Bodily Injury
(BI) & Property Damage (PD) damage resulting from the injured's use of an
automobile for which the insured becomes legally liable.
- Covers Third Party Only
- Pays for both $pecial and General Damages
Loss of Use - correct-answer -The inconvenience caused to an individual for the
inability to use property.
,2|Page
Underinsured Motorist Coverage (UIM) - correct-answer -Covers the insured
when involved in an accident with a driver who has auto liability insurance, but
the limit of this insurance is insufficient to pay for the insured's damage.
Collision - correct-answer -The upset of a covered auto or its impact with another
motor vehicle .
Comprehensive - correct-answer -Addresses property damage losses to the
insured vehicle involving losses other than collisions.
Examples:
- Contact with birds or animals
- Theft or larceny
- Fire
- Hair, water, or flood
- Vandalism or malicious mischief (VMM)
- Breakage of glass
,3|Page
Nonowned Auto - correct-answer -Any private passenger vehicle not owned by
the insured being operated by the insured.
Examples:
- Rental Car
- Temporary Substitute
APIP - correct-answer -Additional Personal Injury Protection (optional)
OBEL - correct-answer -Optional Basic Economic Loss
Additional $25,000 to be assigned to any combination of Medical Expenses, Loss
Wages, Rehab.
, 4|Page
Red Lining - correct-answer -No insurer may refuse to issue or renew an auto
policy because of age, sex, race, occupation or principal place of garaging of the
named insured.
Stacking - correct-answer -The practice of adding (stacking) the limits of all
applicable policies to address a given loss.
Flood - correct-answer -A general or temporary condition of partial or complete
inundation of normally dry land areas.
Must affect:
- 2 or more acres
or
- 2 or more properties
