AD BANKER PROPERTY & CASUALTY ACTUAL EXAM –
COMPREHENSIVE NEWEST QUESTION REVIEW WITH VERIFIED
ANSWERS | 2026 EDITION | GUARANTEED PASS
PREPARATION| PDF
This exam contains realistic Property & Casualty questions based on AD Banker materials, covering
homeowners, commercial property, auto, and liability insurance. Each question includes correct answers
to help you prepare for the 2025 licensing exam.
1. Which of the following is considered a peril in property insurance?
A. Fire
B. Theft
C. Windstorm
D. All of the above
2. In property insurance, a named peril policy covers:
A. All risks except those specifically excluded
B. Only the perils listed in the policy
C. Liability claims
D. All property damages automatically
3. The policy provision that requires the insured to report losses promptly is called:
A. Insuring Agreement
B. Conditions
C. Exclusions
D. Declarations
4. Which of the following is covered under a standard homeowners policy (HO-3)?
A. Personal property on the premises
B. Dwelling structure
C. Liability for bodily injury
D. All of the above
,5. The purpose of coinsurance in a property policy is to:
A. Reduce premium costs
B. Encourage the insured to carry adequate insurance
C. Limit liability coverage
D. Exclude certain perils
6. Which type of property policy covers all risks of physical loss unless specifically
excluded?
A. Named Peril
B. Open Peril / All-Risk
C. Liability Policy
D. Casualty Policy
7. In casualty insurance, the term “liability” refers to:
A. Damage to the insured’s property
B. Legal responsibility for injury or damage to others
C. Loss caused by fire
D. Health insurance coverage
8. In an auto insurance policy, liability coverage protects:
A. The insured’s vehicle
B. Third parties for bodily injury and property damage
C. The insured for medical bills
D. Uninsured motorists
9. The purpose of subrogation is to:
A. Increase policy limits
B. Reduce deductibles
C. Allow the insurer to recover payments from a third party responsible for the loss
D. Cancel a policy
,10. Which of the following is an example of a named insured in a property policy?
A. Mortgagee
B. Homeowner listed on the declarations page
C. Adjacent neighbor
D. Insurance agent
11. In commercial property insurance, the term “business interruption” refers to:
A. Damage to equipment
B. Liability claims
C. Loss of income due to a covered peril causing business shutdown
D. Theft of inventory
12. In a liability policy, “occurrence” coverage means:
A. Coverage only during a single event
B. Coverage for claims arising from incidents that occur during the policy period
C. Coverage for intentional acts
D. Coverage for property damage only
13. The purpose of an endorsement is to:
A. Cancel a policy
B. Reduce coverage
C. Modify the terms, conditions, or coverage of a policy
D. Limit deductibles
14. Which of the following is typically excluded in property insurance?
A. Fire damage
B. Lightning
C. Flood and earthquake unless endorsed
D. Theft
, 15. The section of a policy that states the insurance company’s promise to pay is called:
A. Declarations
B. Conditions
C. Exclusions
D. Insuring Agreement
16. In liability insurance, a “claim” is:
A. Payment to the insured
B. A demand for payment or action under the policy
C. The premium
D. A policy endorsement
17. The legal principle that the insured cannot profit from insurance is called:
A. Subrogation
B. Indemnity
C. Insurable interest
D. Waiver
18. Which homeowners form provides the broadest coverage for personal property?
A. HO-1
B. HO-2
C. HO-5
D. HO-5 (Comprehensive Form)
19. In an auto policy, the part that covers damage to your own vehicle is:
A. Liability
B. Medical payments
C. Collision and comprehensive
D. Uninsured motorist
COMPREHENSIVE NEWEST QUESTION REVIEW WITH VERIFIED
ANSWERS | 2026 EDITION | GUARANTEED PASS
PREPARATION| PDF
This exam contains realistic Property & Casualty questions based on AD Banker materials, covering
homeowners, commercial property, auto, and liability insurance. Each question includes correct answers
to help you prepare for the 2025 licensing exam.
1. Which of the following is considered a peril in property insurance?
A. Fire
B. Theft
C. Windstorm
D. All of the above
2. In property insurance, a named peril policy covers:
A. All risks except those specifically excluded
B. Only the perils listed in the policy
C. Liability claims
D. All property damages automatically
3. The policy provision that requires the insured to report losses promptly is called:
A. Insuring Agreement
B. Conditions
C. Exclusions
D. Declarations
4. Which of the following is covered under a standard homeowners policy (HO-3)?
A. Personal property on the premises
B. Dwelling structure
C. Liability for bodily injury
D. All of the above
,5. The purpose of coinsurance in a property policy is to:
A. Reduce premium costs
B. Encourage the insured to carry adequate insurance
C. Limit liability coverage
D. Exclude certain perils
6. Which type of property policy covers all risks of physical loss unless specifically
excluded?
A. Named Peril
B. Open Peril / All-Risk
C. Liability Policy
D. Casualty Policy
7. In casualty insurance, the term “liability” refers to:
A. Damage to the insured’s property
B. Legal responsibility for injury or damage to others
C. Loss caused by fire
D. Health insurance coverage
8. In an auto insurance policy, liability coverage protects:
A. The insured’s vehicle
B. Third parties for bodily injury and property damage
C. The insured for medical bills
D. Uninsured motorists
9. The purpose of subrogation is to:
A. Increase policy limits
B. Reduce deductibles
C. Allow the insurer to recover payments from a third party responsible for the loss
D. Cancel a policy
,10. Which of the following is an example of a named insured in a property policy?
A. Mortgagee
B. Homeowner listed on the declarations page
C. Adjacent neighbor
D. Insurance agent
11. In commercial property insurance, the term “business interruption” refers to:
A. Damage to equipment
B. Liability claims
C. Loss of income due to a covered peril causing business shutdown
D. Theft of inventory
12. In a liability policy, “occurrence” coverage means:
A. Coverage only during a single event
B. Coverage for claims arising from incidents that occur during the policy period
C. Coverage for intentional acts
D. Coverage for property damage only
13. The purpose of an endorsement is to:
A. Cancel a policy
B. Reduce coverage
C. Modify the terms, conditions, or coverage of a policy
D. Limit deductibles
14. Which of the following is typically excluded in property insurance?
A. Fire damage
B. Lightning
C. Flood and earthquake unless endorsed
D. Theft
, 15. The section of a policy that states the insurance company’s promise to pay is called:
A. Declarations
B. Conditions
C. Exclusions
D. Insuring Agreement
16. In liability insurance, a “claim” is:
A. Payment to the insured
B. A demand for payment or action under the policy
C. The premium
D. A policy endorsement
17. The legal principle that the insured cannot profit from insurance is called:
A. Subrogation
B. Indemnity
C. Insurable interest
D. Waiver
18. Which homeowners form provides the broadest coverage for personal property?
A. HO-1
B. HO-2
C. HO-5
D. HO-5 (Comprehensive Form)
19. In an auto policy, the part that covers damage to your own vehicle is:
A. Liability
B. Medical payments
C. Collision and comprehensive
D. Uninsured motorist
