TENNESSEE PROPERTY AND
CASUALTY EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
An individual applied for auto insurance and obtained coverage from ABC Insurance Company.
Who is the first party in the contract?
A. The insured
B. The insurer
C. The agent
D. The insured and agent - ANS The insured (customer)
If a fire causes damge to a building the fire is
A. a hazard
B. a peril
C. a risk
D. an exposure - ANS A peril
Wearing a seatbelt in a car is an example if which method of managing risk?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. Retain
B. Avoid
C. Reduce
D. Transfer - ANS Reduce
Tiff leaves her car unlocked when she goes shopping. She figures her car and its contents are
insured, so there is no reason to worry. Which type of hazard is this an example of?
A. Physical
B. Morale
C. Carless
D. Moral - ANS Morale
A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard - ANS Peril
An insurance company incorporated in Wisconsin and conducting business in Wisconsin is
known as a domestic company. What kind of company are they considered if they do business
in Minnesota
A. Alien
B. Domestic
C. Foreign
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, D. Nonadmitted - ANS Foreign
All of the following statements about a stock company are true except:
A. stock company pays dividends to stockholders
B. stock company is a participating company
C. stock company is a nonparticipating company
D. stock company has shareholders - ANS stock company is a participating company
What do insurance companies use to help predict how many losses will occur in a group or class
of individuals?
A. The law of large numbers
B. Standard and Poor's Insurance Rating Service
C. Risk retention group
D. Adverse selection - ANS The law of large numbers
State requires companies to have a license to sell insurance in the state. The license is called:
A. a certificate of authority
B. a reinsurance license
C. a producer's license
D. an admittance license - ANS a certificate of authority
All of the following are requirements of an insurable pure risk EXCEPT:
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
CASUALTY EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
An individual applied for auto insurance and obtained coverage from ABC Insurance Company.
Who is the first party in the contract?
A. The insured
B. The insurer
C. The agent
D. The insured and agent - ANS The insured (customer)
If a fire causes damge to a building the fire is
A. a hazard
B. a peril
C. a risk
D. an exposure - ANS A peril
Wearing a seatbelt in a car is an example if which method of managing risk?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. Retain
B. Avoid
C. Reduce
D. Transfer - ANS Reduce
Tiff leaves her car unlocked when she goes shopping. She figures her car and its contents are
insured, so there is no reason to worry. Which type of hazard is this an example of?
A. Physical
B. Morale
C. Carless
D. Moral - ANS Morale
A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard - ANS Peril
An insurance company incorporated in Wisconsin and conducting business in Wisconsin is
known as a domestic company. What kind of company are they considered if they do business
in Minnesota
A. Alien
B. Domestic
C. Foreign
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, D. Nonadmitted - ANS Foreign
All of the following statements about a stock company are true except:
A. stock company pays dividends to stockholders
B. stock company is a participating company
C. stock company is a nonparticipating company
D. stock company has shareholders - ANS stock company is a participating company
What do insurance companies use to help predict how many losses will occur in a group or class
of individuals?
A. The law of large numbers
B. Standard and Poor's Insurance Rating Service
C. Risk retention group
D. Adverse selection - ANS The law of large numbers
State requires companies to have a license to sell insurance in the state. The license is called:
A. a certificate of authority
B. a reinsurance license
C. a producer's license
D. an admittance license - ANS a certificate of authority
All of the following are requirements of an insurable pure risk EXCEPT:
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
