1
PR0PERTY
Property and Casualty Insurance Exam 2026
Practice Questions with Verified Solution
Explanations Latest Update
Underwriting - ANS ✓the pr0cess 0f selecting, classifying, and pricing applicants
f0r insurance
Express auth0rity - ANS ✓Auth0rity given specifically t0 an agent 0rally 0r in
writing by the principal
Written auth0rity - ANS ✓Pr0vided thr0ugh agency agreement that all0ws agent
t0 c0untersign, issue, and deliver p0licies and pr0vide 0ther services
Implied auth0rity - ANS ✓Auth0rity given by insurance c0mpany that is n0t
f0rmally expressed 0r c0mmunicated - includes acti0ns necessary t0 carry 0ut
expressed auth0rity
Apparent auth0rity - ANS ✓D0ctrine that h0lds that an agent may/may n0t have
whatever auth0rity a reas0nable pers0n w0uld assume the agent has
P0licy analyst 0r screener - ANS ✓s0me0ne wh0 checks applicati0ns given by
underwriter 0nce they've been appr0ved by the underwriter
Actuaries - ANS ✓determine rates t0 be charged f0r vari0us types 0f insurance
Waiver 0f Subr0gati0n - ANS ✓Insured waives their insurance pr0viders right t0
seek c0mpensati0n f0r civil damages by a 3rd party
PR0PERTY AND CASUALTY
, 2
PR0PERTY
Retr0spective rating - ANS ✓bases insured's premium 0n l0sses incurred during
the p0licy peri0d
Adverse selecti0n - ANS ✓the tendency f0r pe0ple with greater than average
exp0sure t0 l0ss t0 purchase insurance
Ratificati0n - ANS ✓state insurance departments appr0val 0f p0licy f0rms,
end0rsements, and rates used by c0mpanies d0ing business in that state
Rebating - ANS ✓giving/0ffering s0me s0rt 0f benefit 0ther than th0se stated in
the p0licy, such as m0ney 0r a gift, t0 c0nvince a cust0mer t0 buy insurance (illegal)
Reinsurance - ANS ✓insurance c0mpanies purchasing their 0wn insurance t0
c0ver l0ss exp0sure
Claims adjuster - ANS ✓inspect a l0ss, determine whether there is c0verage f0r
the l0ss, determine indemnificati0n, and in s0me cases pay f0r the l0ss
immediately
Named insured - ANS ✓the pers0n, business, 0r entity named in the declarati0ns
t0 wh0m the p0licy is issued
First named insured - ANS ✓first name listed 0n the declarati0ns page
Additi0nal insured - ANS ✓an additi0nal entity that can be listed 0n the
declarati0ns page, such as a m0rtgage c0mpany
P0licy limit - ANS ✓aka limit 0f c0verage, limit 0f liability, etc. - the maximum
am0unt an insurer will pay f0r a l0ss
PR0PERTY AND CASUALTY
, 3
PR0PERTY
Assignment c0nditi0n - ANS ✓specifies that a p0licy may n0t be transferred t0
any0ne else with0ut the written c0nsent 0f the insurer unless the named insured
dies
Vacancy - ANS ✓absence 0f pe0ple and pr0perty fr0m a certain % 0f the premises
Un0ccupied - ANS ✓absence 0f pe0ple fr0m a certain % 0f the premises
T0rt - ANS ✓a civil wr0ng that vi0lated the rights 0f an0ther
Pr0ximate cause 0f l0ss - ANS ✓Unbr0ken chain 0f events leading fr0m the
negligent act t0 damage sustained
Intervening cause 0f l0ss - ANS ✓an event that interrupts the chain 0f causati0n
by pr0viding an independent cause 0f the final result
Statute 0f limitati0ns - ANS ✓certain types 0f lawsuits must be filed within a
specified time 0f the 0ccurrence t0 be valid under law
Premises risk exp0sure - ANS ✓risk arises fr0m the 0wnership, use, 0r
0ccupancy 0f pr0perty
0perati0nal risk exp0sure - ANS ✓risk arises fr0m 0ng0ing activity 0f business in
additi0n t0 0ccupancy
Pr0duct liability c0verage - ANS ✓Pr0vides c0verage if a user/c0nsumer
experiences injury 0r damage as a result 0f defective, unsafe, 0r danger0us
pr0ducts
PR0PERTY AND CASUALTY
, 4
PR0PERTY
C0mpleted 0perati0ns risk - ANS ✓risk arises fr0m p0tential liability 0f a
c0ntract0r, service pr0vider, repair pers0n, etc. f0r l0sses arising fr0m their
c0mpleted w0rk
Real pr0perty - ANS ✓land and any permanent structures (ex: h0use, barn, etc.)
Pers0nal pr0perty - ANS ✓M0vable p0ssessi0ns within/0n a pr0perty (ex: jewelry,
vehicles, furniture, etc)
Business pers0nal pr0perty - ANS ✓M0vable pr0perty used by the business that
is l0cated in 0r 0n a structure, 0r within 100ft 0f the building
Business aut0 symb0l 1 - ANS ✓Any aut0; used f0r liability 0nly, n0t f0r damage
Business aut0 symb0l 2 - ANS ✓Any 0wned aut0s 0nly; br0ad c0verage
Business aut0 symb0l 3 - ANS ✓0wned private passenger type aut0s; br0ad
c0verage
Business aut0 symb0l 4 - ANS ✓0wned aut0s 0ther than private passenger aut0s
0nly; br0ad
Business aut0 symb0l 5 - ANS ✓0wned aut0s subject t0 n0 fault
Business aut0 symb0l 6 - ANS ✓0wned aut0s subject t0 a c0mpuls0ry uninsured
m0t0rist law; c0vers any aut0 0wned by insured garaged 0r licensed in a state
where drivers are required t0 have uninsured m0t0rists c0verage
PR0PERTY AND CASUALTY
PR0PERTY
Property and Casualty Insurance Exam 2026
Practice Questions with Verified Solution
Explanations Latest Update
Underwriting - ANS ✓the pr0cess 0f selecting, classifying, and pricing applicants
f0r insurance
Express auth0rity - ANS ✓Auth0rity given specifically t0 an agent 0rally 0r in
writing by the principal
Written auth0rity - ANS ✓Pr0vided thr0ugh agency agreement that all0ws agent
t0 c0untersign, issue, and deliver p0licies and pr0vide 0ther services
Implied auth0rity - ANS ✓Auth0rity given by insurance c0mpany that is n0t
f0rmally expressed 0r c0mmunicated - includes acti0ns necessary t0 carry 0ut
expressed auth0rity
Apparent auth0rity - ANS ✓D0ctrine that h0lds that an agent may/may n0t have
whatever auth0rity a reas0nable pers0n w0uld assume the agent has
P0licy analyst 0r screener - ANS ✓s0me0ne wh0 checks applicati0ns given by
underwriter 0nce they've been appr0ved by the underwriter
Actuaries - ANS ✓determine rates t0 be charged f0r vari0us types 0f insurance
Waiver 0f Subr0gati0n - ANS ✓Insured waives their insurance pr0viders right t0
seek c0mpensati0n f0r civil damages by a 3rd party
PR0PERTY AND CASUALTY
, 2
PR0PERTY
Retr0spective rating - ANS ✓bases insured's premium 0n l0sses incurred during
the p0licy peri0d
Adverse selecti0n - ANS ✓the tendency f0r pe0ple with greater than average
exp0sure t0 l0ss t0 purchase insurance
Ratificati0n - ANS ✓state insurance departments appr0val 0f p0licy f0rms,
end0rsements, and rates used by c0mpanies d0ing business in that state
Rebating - ANS ✓giving/0ffering s0me s0rt 0f benefit 0ther than th0se stated in
the p0licy, such as m0ney 0r a gift, t0 c0nvince a cust0mer t0 buy insurance (illegal)
Reinsurance - ANS ✓insurance c0mpanies purchasing their 0wn insurance t0
c0ver l0ss exp0sure
Claims adjuster - ANS ✓inspect a l0ss, determine whether there is c0verage f0r
the l0ss, determine indemnificati0n, and in s0me cases pay f0r the l0ss
immediately
Named insured - ANS ✓the pers0n, business, 0r entity named in the declarati0ns
t0 wh0m the p0licy is issued
First named insured - ANS ✓first name listed 0n the declarati0ns page
Additi0nal insured - ANS ✓an additi0nal entity that can be listed 0n the
declarati0ns page, such as a m0rtgage c0mpany
P0licy limit - ANS ✓aka limit 0f c0verage, limit 0f liability, etc. - the maximum
am0unt an insurer will pay f0r a l0ss
PR0PERTY AND CASUALTY
, 3
PR0PERTY
Assignment c0nditi0n - ANS ✓specifies that a p0licy may n0t be transferred t0
any0ne else with0ut the written c0nsent 0f the insurer unless the named insured
dies
Vacancy - ANS ✓absence 0f pe0ple and pr0perty fr0m a certain % 0f the premises
Un0ccupied - ANS ✓absence 0f pe0ple fr0m a certain % 0f the premises
T0rt - ANS ✓a civil wr0ng that vi0lated the rights 0f an0ther
Pr0ximate cause 0f l0ss - ANS ✓Unbr0ken chain 0f events leading fr0m the
negligent act t0 damage sustained
Intervening cause 0f l0ss - ANS ✓an event that interrupts the chain 0f causati0n
by pr0viding an independent cause 0f the final result
Statute 0f limitati0ns - ANS ✓certain types 0f lawsuits must be filed within a
specified time 0f the 0ccurrence t0 be valid under law
Premises risk exp0sure - ANS ✓risk arises fr0m the 0wnership, use, 0r
0ccupancy 0f pr0perty
0perati0nal risk exp0sure - ANS ✓risk arises fr0m 0ng0ing activity 0f business in
additi0n t0 0ccupancy
Pr0duct liability c0verage - ANS ✓Pr0vides c0verage if a user/c0nsumer
experiences injury 0r damage as a result 0f defective, unsafe, 0r danger0us
pr0ducts
PR0PERTY AND CASUALTY
, 4
PR0PERTY
C0mpleted 0perati0ns risk - ANS ✓risk arises fr0m p0tential liability 0f a
c0ntract0r, service pr0vider, repair pers0n, etc. f0r l0sses arising fr0m their
c0mpleted w0rk
Real pr0perty - ANS ✓land and any permanent structures (ex: h0use, barn, etc.)
Pers0nal pr0perty - ANS ✓M0vable p0ssessi0ns within/0n a pr0perty (ex: jewelry,
vehicles, furniture, etc)
Business pers0nal pr0perty - ANS ✓M0vable pr0perty used by the business that
is l0cated in 0r 0n a structure, 0r within 100ft 0f the building
Business aut0 symb0l 1 - ANS ✓Any aut0; used f0r liability 0nly, n0t f0r damage
Business aut0 symb0l 2 - ANS ✓Any 0wned aut0s 0nly; br0ad c0verage
Business aut0 symb0l 3 - ANS ✓0wned private passenger type aut0s; br0ad
c0verage
Business aut0 symb0l 4 - ANS ✓0wned aut0s 0ther than private passenger aut0s
0nly; br0ad
Business aut0 symb0l 5 - ANS ✓0wned aut0s subject t0 n0 fault
Business aut0 symb0l 6 - ANS ✓0wned aut0s subject t0 a c0mpuls0ry uninsured
m0t0rist law; c0vers any aut0 0wned by insured garaged 0r licensed in a state
where drivers are required t0 have uninsured m0t0rists c0verage
PR0PERTY AND CASUALTY
