©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
Georgia Property & Casualty Exam
Questions And Answers 2025 Update.
Which of the following correctly describes a principal difference between a dwelling policy and
a homeowners policy?
A.) A dwelling policy only covers the dwelling, other structures, personal property, fair rental
value, and additional living expenses. It does not cover liability.
B.) Both policies are almost identical, except that the homeowners policy focuses on the more
expensive homes.
C.) A dwelling policy requires that the owner occupy the dwelling.
D.) Although any one- to four-family dwelling is eligible for a homeowners policy, only a one-
family dwelling is eligible for a dwelling policy. - Answer✔A.) A dwelling policy only covers the
dwelling, other structures, personal property, fair rental value, and additional living expenses. It
does not cover liability.
All of the following statements regarding the dwelling policy are correct EXCEPT:
A.) There are six dwelling policy forms.
B.) An unendorsed dwelling policy provides property coverage only; it does not include liability
coverage.
C.) The dwelling policy can cover a residence for less cost than a homeowners policy.
D.) The dwelling policy covers personal property as well as the dwelling itself. - Answer✔A.)
There are six dwelling policy forms.
There are actually only three: basic, broad, and special.
What endorsement should Jeffrey's Flowers add to its commercial property policy if it wants
coverage for breakdown or contamination and power outage?
1
,©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
A.) Ordinance or Law
B.) Peak Season
C.) Spoilage Coverage
D.) Value Reporting Form - Answer✔C.) Spoilage Coverage
Most insurance regulation is conducted by the:
A.) Federal Insurance Office
B.) U.S. Congress
C.) U.S. Department of Health, Education and Welfare
D.) State Government Agencies - Answer✔D.) State Government Agencies
Which of the following is an example of adverse selection?
A.) an applicant who just bought a new car and wants to buy the least expensive auto policy
B.) a homeowner who wants to meet with her agent to discuss her current coverages following
some recent home improvements
C.) an applicant whose business was recently burglarized deciding he had better buy some
commercial crime insurance coverage
D.) a business owner who decides to cancel his business owner's policy because he believes he
can financially handle any losses that might occur - Answer✔C.) an applicant whose business
was recently burglarized deciding he had better buy some commercial crime insurance
coverage
When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes
a misleading statement to convince an insurance prospect to terminate a policy with Zenith and
buy one from Melanie's company. Melanie has engaged in:
A.) Twisting
B.) Rebating
C.) Unfair discrimination
D.) Defamation - Answer✔A.) Twisting
2
,©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
Stuart receives a notice from his insurance company telling him that his policy will be
terminated at the end of the policy period. The notice provides a reason, which can be any of
the following EXCEPT:
A.) He filed a false claim.
B.) He failed to disclose information necessary to properly rate the risk.
C.) He failed to pay the premium.
D.) He was in a traffic accident caused by another driver. - Answer✔D.) He was in a traffic
accident caused by another driver.
Which type of insurance company pays policy dividends to its policyowners?
A.) stock insurance company
B.) mutual insurance company
C.) captive insurance company
D.) reinsurance company - Answer✔B.) mutual insurance company
Which of the following would be recognized as a residence employee under the liability section
of a homeowners policy?
A.) the insured's CPA who is meeting at the insured's home to review business tax plans
B.) the insured's gardener who lives in a small cottage on the insured's land
C.) the insured who works out of her home
D.) an independent contractor hired by the insured to construct a new addition to the insured's
home - Answer✔B.) the insured's gardener who lives in a small cottage on the insured's land
What are the two types of compensatory damages?
A.) special and punitive
B.) special and general
C.) general and punitive
D.) specific and general - Answer✔B.) special and general
3
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
Smith received $20,000 in premiums from his clients and used half of the funds to buy a new
entertainment system for his office. Which of the following penalties may be imposed for this
misconduct?
A.) License suspension for up to six months
B.) Restitution
C.) Felony conviction
D.) Fine of up to $50,000 - Answer✔C.) Felony conviction
Fire is a named peril that may be designated as "friendly" or "hostile." All of the following would
be considered a friendly fire EXCEPT:
A.) a fire in a wood-burning fireplace
B.) a fire in a barbecue pit
C.) a fire in a forest
D.) a fire in an incinerator - Answer✔C.) a fire in a forest
Hart Food Supply was forced to shut down when the electrical service to its building was
disrupted due to a motor vehicle accident that took place on the other side of town. How will
the Special Causes of Loss Form on Hart's commercial property policy respond to its claim for
spoiled inventory?
A.) It will pay the claim after applying the deductible.
B.) It will pay the claim; no deductible applies to coverage for power failure.
C.) It will deny the claim under the Loss of Market exclusion.
D.) It will deny the claim under the Off-Premises Utility Service Interruption exclusion. -
Answer✔D.) It will deny the claim under the Off-Premises Utility Service Interruption exclusion.
No coverage is provided for interruption of utility services that originates off the insured
premises.
When Mr. Huan's piano was damaged by vandals who broke into his house, the insurance
company subtracted $200 for depreciation when it made its settlement offer. On what basis did
the insurer value Mr. Huan's loss?
4
Georgia Property & Casualty Exam
Questions And Answers 2025 Update.
Which of the following correctly describes a principal difference between a dwelling policy and
a homeowners policy?
A.) A dwelling policy only covers the dwelling, other structures, personal property, fair rental
value, and additional living expenses. It does not cover liability.
B.) Both policies are almost identical, except that the homeowners policy focuses on the more
expensive homes.
C.) A dwelling policy requires that the owner occupy the dwelling.
D.) Although any one- to four-family dwelling is eligible for a homeowners policy, only a one-
family dwelling is eligible for a dwelling policy. - Answer✔A.) A dwelling policy only covers the
dwelling, other structures, personal property, fair rental value, and additional living expenses. It
does not cover liability.
All of the following statements regarding the dwelling policy are correct EXCEPT:
A.) There are six dwelling policy forms.
B.) An unendorsed dwelling policy provides property coverage only; it does not include liability
coverage.
C.) The dwelling policy can cover a residence for less cost than a homeowners policy.
D.) The dwelling policy covers personal property as well as the dwelling itself. - Answer✔A.)
There are six dwelling policy forms.
There are actually only three: basic, broad, and special.
What endorsement should Jeffrey's Flowers add to its commercial property policy if it wants
coverage for breakdown or contamination and power outage?
1
,©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
A.) Ordinance or Law
B.) Peak Season
C.) Spoilage Coverage
D.) Value Reporting Form - Answer✔C.) Spoilage Coverage
Most insurance regulation is conducted by the:
A.) Federal Insurance Office
B.) U.S. Congress
C.) U.S. Department of Health, Education and Welfare
D.) State Government Agencies - Answer✔D.) State Government Agencies
Which of the following is an example of adverse selection?
A.) an applicant who just bought a new car and wants to buy the least expensive auto policy
B.) a homeowner who wants to meet with her agent to discuss her current coverages following
some recent home improvements
C.) an applicant whose business was recently burglarized deciding he had better buy some
commercial crime insurance coverage
D.) a business owner who decides to cancel his business owner's policy because he believes he
can financially handle any losses that might occur - Answer✔C.) an applicant whose business
was recently burglarized deciding he had better buy some commercial crime insurance
coverage
When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes
a misleading statement to convince an insurance prospect to terminate a policy with Zenith and
buy one from Melanie's company. Melanie has engaged in:
A.) Twisting
B.) Rebating
C.) Unfair discrimination
D.) Defamation - Answer✔A.) Twisting
2
,©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
Stuart receives a notice from his insurance company telling him that his policy will be
terminated at the end of the policy period. The notice provides a reason, which can be any of
the following EXCEPT:
A.) He filed a false claim.
B.) He failed to disclose information necessary to properly rate the risk.
C.) He failed to pay the premium.
D.) He was in a traffic accident caused by another driver. - Answer✔D.) He was in a traffic
accident caused by another driver.
Which type of insurance company pays policy dividends to its policyowners?
A.) stock insurance company
B.) mutual insurance company
C.) captive insurance company
D.) reinsurance company - Answer✔B.) mutual insurance company
Which of the following would be recognized as a residence employee under the liability section
of a homeowners policy?
A.) the insured's CPA who is meeting at the insured's home to review business tax plans
B.) the insured's gardener who lives in a small cottage on the insured's land
C.) the insured who works out of her home
D.) an independent contractor hired by the insured to construct a new addition to the insured's
home - Answer✔B.) the insured's gardener who lives in a small cottage on the insured's land
What are the two types of compensatory damages?
A.) special and punitive
B.) special and general
C.) general and punitive
D.) specific and general - Answer✔B.) special and general
3
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:54PM.
Smith received $20,000 in premiums from his clients and used half of the funds to buy a new
entertainment system for his office. Which of the following penalties may be imposed for this
misconduct?
A.) License suspension for up to six months
B.) Restitution
C.) Felony conviction
D.) Fine of up to $50,000 - Answer✔C.) Felony conviction
Fire is a named peril that may be designated as "friendly" or "hostile." All of the following would
be considered a friendly fire EXCEPT:
A.) a fire in a wood-burning fireplace
B.) a fire in a barbecue pit
C.) a fire in a forest
D.) a fire in an incinerator - Answer✔C.) a fire in a forest
Hart Food Supply was forced to shut down when the electrical service to its building was
disrupted due to a motor vehicle accident that took place on the other side of town. How will
the Special Causes of Loss Form on Hart's commercial property policy respond to its claim for
spoiled inventory?
A.) It will pay the claim after applying the deductible.
B.) It will pay the claim; no deductible applies to coverage for power failure.
C.) It will deny the claim under the Loss of Market exclusion.
D.) It will deny the claim under the Off-Premises Utility Service Interruption exclusion. -
Answer✔D.) It will deny the claim under the Off-Premises Utility Service Interruption exclusion.
No coverage is provided for interruption of utility services that originates off the insured
premises.
When Mr. Huan's piano was damaged by vandals who broke into his house, the insurance
company subtracted $200 for depreciation when it made its settlement offer. On what basis did
the insurer value Mr. Huan's loss?
4
