1|Page
PROPERTY AND CASUALTY TEST EXAM ACTUAL
EXAM WITH QUESTIONS AND 100% CORRECT
ANSWERS|| LATEST AND COMPLETE VERSION 2025-
2026 WITH EXPERT VERIFIED SOLUTIONS|| ASSURED
PASS
The roof of Robbie's home was badly damaged by hail and had to be replaced.
Fortunately, Robbie's insurance covered losses caused by hail. In this situation, hail
is a(n):
-hazard
-risk
-exposure
-peril - ANSWER: Peril
By purchasing an insurance policy, a person manages risk by
-retaining it
-avoiding it
-transferring it
-controlling it - ANSWER: Transferring it
Because the Bender Insurance Company insures a large number of similar
convenience stores against fire:
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy than if it insured only a
few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss control. - ANSWER:
Bender can predict its losses with much more accuracy than if it insured only a few
stores.
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Rory's parents offered to buy him a new car to take to college, but Rory turned
them down because he was afraid the car would be stolen or damaged if he parked
it on campus. In deciding not to own a car, what risk management technique did
Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention - ANSWER: Risk Avoidance
RST Insurance Company sells auto insurance only through the Internet. What type
of marketing system does RST use?
-direct response marketing
-insurance brokers
-the independent agency system
-the exclusive agency system - ANSWER: Direct Response Marketing
While giving a speech, the state insurance commissioner refers to VWX Insurance
Company as an alien insurer. Assuming the description is accurate, where does
VWX Insurance Company have its headquarters? - ANSWER: Outside the US
Roberto works for an organization that places excess and surplus lines insurance
coverage with nonadmitted insurers. What is Roberto's employer?
-independent insurance agent
-surplus lines broker
-direct writer
-unauthorized entity - ANSWER: Surplus Lines Broker
, 3|Page
Emory and a number of other members of his church buy life insurance from a
church-related organization that provides insurance to members of a particular
religious body. What kind of organization is it?
-reciprocal insurer
-county mutual
-purchasing group
-fraternal benefit society - ANSWER: Fraternal Benefit Society
Cindy and Sandy are insurance producers. Although both sell auto insurance,
Cindy sells policies for several insurance companies, while Sandy sells policies for
one company. Which statement is correct?
-Cindy is an exclusive producer, and Sandy is an independent producer.
-Sandy is an exclusive producer, and Cindy is an independent producer.
-Both are exclusive producers.
-Both are independent producers. - ANSWER: Sandy is an exclusive producer,
and Cindy is an independent producer.
When considering the suitability of an insurance product to a particular customer,
an agent's primary duty is to determine whether the product
-s the most affordable
-will yield the most in premium payments
-is most appropriate for the customer's needs
-will earn the most commission - ANSWER: Is most appropriate for the customers
needs
Because the insurer he represents was running a liability umbrella sales contest,
Daniel talked Jill, his agency's customer, into buying a personal umbrella policy
although he realized the money would better be spent on disability insurance in her
circumstances. What standard does Daniel's recommendation fail to meet?
PROPERTY AND CASUALTY TEST EXAM ACTUAL
EXAM WITH QUESTIONS AND 100% CORRECT
ANSWERS|| LATEST AND COMPLETE VERSION 2025-
2026 WITH EXPERT VERIFIED SOLUTIONS|| ASSURED
PASS
The roof of Robbie's home was badly damaged by hail and had to be replaced.
Fortunately, Robbie's insurance covered losses caused by hail. In this situation, hail
is a(n):
-hazard
-risk
-exposure
-peril - ANSWER: Peril
By purchasing an insurance policy, a person manages risk by
-retaining it
-avoiding it
-transferring it
-controlling it - ANSWER: Transferring it
Because the Bender Insurance Company insures a large number of similar
convenience stores against fire:
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy than if it insured only a
few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss control. - ANSWER:
Bender can predict its losses with much more accuracy than if it insured only a few
stores.
,2|Page
Rory's parents offered to buy him a new car to take to college, but Rory turned
them down because he was afraid the car would be stolen or damaged if he parked
it on campus. In deciding not to own a car, what risk management technique did
Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention - ANSWER: Risk Avoidance
RST Insurance Company sells auto insurance only through the Internet. What type
of marketing system does RST use?
-direct response marketing
-insurance brokers
-the independent agency system
-the exclusive agency system - ANSWER: Direct Response Marketing
While giving a speech, the state insurance commissioner refers to VWX Insurance
Company as an alien insurer. Assuming the description is accurate, where does
VWX Insurance Company have its headquarters? - ANSWER: Outside the US
Roberto works for an organization that places excess and surplus lines insurance
coverage with nonadmitted insurers. What is Roberto's employer?
-independent insurance agent
-surplus lines broker
-direct writer
-unauthorized entity - ANSWER: Surplus Lines Broker
, 3|Page
Emory and a number of other members of his church buy life insurance from a
church-related organization that provides insurance to members of a particular
religious body. What kind of organization is it?
-reciprocal insurer
-county mutual
-purchasing group
-fraternal benefit society - ANSWER: Fraternal Benefit Society
Cindy and Sandy are insurance producers. Although both sell auto insurance,
Cindy sells policies for several insurance companies, while Sandy sells policies for
one company. Which statement is correct?
-Cindy is an exclusive producer, and Sandy is an independent producer.
-Sandy is an exclusive producer, and Cindy is an independent producer.
-Both are exclusive producers.
-Both are independent producers. - ANSWER: Sandy is an exclusive producer,
and Cindy is an independent producer.
When considering the suitability of an insurance product to a particular customer,
an agent's primary duty is to determine whether the product
-s the most affordable
-will yield the most in premium payments
-is most appropriate for the customer's needs
-will earn the most commission - ANSWER: Is most appropriate for the customers
needs
Because the insurer he represents was running a liability umbrella sales contest,
Daniel talked Jill, his agency's customer, into buying a personal umbrella policy
although he realized the money would better be spent on disability insurance in her
circumstances. What standard does Daniel's recommendation fail to meet?
