Summary Property & Casualty Insurance License Test Updated 2022 > Pass the P&C Insurance Licensing Exam With Flying Colors.

Property and casualty insurance Exam Questions and Answers Updated Nov 2022. A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of A builder's risk form is most often written as which of the following? A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered A business using its own trucks to move its own cargo would insure the cargo using - A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT A commercial property special form covers property in transit up to A common exclusion found under physical damage to your auto includes A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license? A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid? A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain A participating insurance policy may do which of the following? A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard? A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the A premium discount is the term that describes when an insured owes a total standard premium greater than A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days? - A ranchowners policy is most similar to which of the following? A recent college graduate bought a new car and is trying to get automobile insurance on it as required by the lienholder. After being rejected by several insurance companies due to his driving record, he finally talked to an agent who can get him coverage. His agent called him a residual market risk. From which type of automobile insurance plan can the applicant purchase insurance? A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy? A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession? A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil? A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n) ABC Trucking hauls products for Acme, Inc. as a contract carrier. On one shipment, the driver stopped at a truck stop for lunch. Leaving the truck in the parking lot, he made certain that the truck was locked before leaving it. Upon returning to the truck, he discovered that someone had broken into the truck and stolen the cargo. Is ABC legally liable for this loss? According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of All of the following actions by a person could be described as risk avoidance EXCEPT All of the following actions can be described as twisting EXCEPT All of the following are conditions commonly found in the insurance policy EXCEPT All of the following are essential elements of a commercial package policy (CPP) EXCEPT All of the following are exclusions under farm property coverage EXCEPT All of the following are factors in the determination of actual cash value EXCEPT All of the following are found in the declarations section of a policy EXCEPT the All of the following are other coverages under the dwelling policy EXCEPT All of the following are true of Coverage B - Other Structures EXCEPT All of the following are true regarding physical damage coverage EXCEPT All of the following are true regarding rebates EXCEPT All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT All of the following statements describe the concept of strict liability EXCEPT An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage? An apartment occupant's personal property would be insured under which homeowners form? An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined? An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces? An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy? An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement? An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees? An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? An insured is driving above the posted speed limit. As he rounds a curve, he crashes into an illegally parked car. This is an example of An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much should he insure the property for? An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? An insured who has coverage for all his personal property has his TV stolen from the shop of the repairman. The owner of the repair shop filed a claim under the insured's policy, but it paid nothing to the owner of the store. Which provision does the policy have? An insured's accounts receivable records have been damaged. The loss may be covered with An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay Bulk carriers are used to transport Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? Coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by an accident if the expenses are incurred and reported to the insurer within how many years of the accident date? Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms? During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes Events in which a person has both the chance of winning or losing are classified as Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish? For how long must a company maintain a complete file of all advertisements used? For the purpose of examination by the department, insurers must keep a record of all financial files for at least Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss? - Utility service Homeowners policies provide coverage for How long is the waiting period after the application has been accepted before flood coverage goes into effect? How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? How much is the premium for the dwelling under construction endorsement under the dwelling policy? How soon after the due date should the insurer pay the agent appointment fees? If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state? If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss? If an employer in a state with elective workers compensation laws chooses not be to subject to those laws, what does the employer lose? If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit? If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? If an insured lives in a high-risk area and can't find an insurer that will cover his/her property, which of the following would most likely provide coverage? If an insurer appoints a producer, which authority must be notified? If an insurer changes a form that it uses to transact insurance, it must do which of the following? If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? If more than one person has an insurable interest in the property covered under a dwelling policy, If the ocean marine contract pays the ACV of the property just prior to the loss, it is In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer? In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT. In addition to income benefits, how much will a dependent survivor receive as a funeral benefit for a deceased employee covered under Workers Compensation? In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT In dwelling policies, automatic increase in insurance is In order to reject uninsured motorist coverage, the first named insured must make the rejection In order to satisfy the Pennsylvania Motor Vehicle Financial Responsibility Law, an auto liability policy issued for delivery in the state must have bodily injury and property damage limits not less than In personal auto policies, the term "you" refers to In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? In property insurance, actual cash value is defined as which of the following? In terms of parties to a contract, which of the following does NOT describe a competent party? In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records? In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? In which of the following situations would punishment include imprisonment? - In which of the following situations would the jewelers block extension cover a loss? In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation? In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period? Individuals in the business of selling construction equipment and mobile equipment should insure with a/an Installing deadbolt locks on the doors of a home is an example of which method of handling risk? Insurable interest in the property covered in a policy must be proven Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to Loss of yield from which of the following causes would be covered under a Federal Crop Insurance policy? Losses caused by vandalism and malicious mischief are excluded under a homeowners policy if the dwelling had been vacant for more than One of the primary benefits to the insured in selecting the "full tort option" under their auto insurance coverage is Personal property coverage under a homeowners policy would cover Pete wants to have separate insurance coverage for separate acreages. What kind of insurance should Pete get? Professional liability coverage protects the insured against legal liability resulting from Professional photographers and musicians may insure their equipment with Rates that are established based on the similarities of the risk with other risks are known as Replacement cost coverage is provided in both the broad and special form dwelling policies when Robbery is State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as The abandonment provision in property insurance policies states that The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? The designation symbols used in commercial auto policies can be found in which policy section? - Covered Auto The Federal Fair Credit Reporting Act The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true? . The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will The legal liability coverage form provides coverage for damages for which the insured is legally liable arising from The major portion of the premium of an equipment breakdown policy pays? - The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT The members of a limited liability company are insureds under a businessowners policy (BOP) if The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called The other insurances clause of an ocean marine policy allows coverage for which reasons? The party to a surety or fidelity bond who promises to fulfill the obligation is the The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called The standard property deductible per occurrence on a commercial package policy is The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? The type of professional liability coverage a medical doctor needs is To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days? To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits? Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? Under the dwelling policy, Coverage C - Personal Property is Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries? Under the provisions of the business income coverage form, all of the following are true EXCEPT Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases? Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT What are common carriers required to issue to every shipper that it transports goods for? What documentation grants express authority to an agent? What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence? What is a Certificate of Insurance? What is a wrongful act or the violation of someone's rights that leads to legal liability called? What is not a consideration when paying an inland marine claim? What is the civil penalty for violating a cease and desist order of the Commissioner? What is the deductible of a personal liability umbrella policy called? What is the limit for the forgery or alteration coverage in the businessowners policy? What is the maximum amount of protection available to insureds under the Pennsylvania Property and Casualty Insurance Guaranty Association? What is the minimum age for obtaining an insurance producer's license in this state? What is the purpose of increased value and excess liability (IVEL) clauses? What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property? What other term is used to refer to unintentional torts? What term best describes the act of withholding material information that would be crucial to an underwriting decision? What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy? What was created to keep telemarketers from calling consumers who do not wish contacted? What will happen if a house covered by a standard mortgage clause is a total loss? When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property? When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? When an individual purchases insurance, what risk management technique is he or she practicing? When the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation? When transacting business in this state an insurer formed under the laws of another country is known as a/an When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered Which coverage form would provide coverage for all incoming and outgoing shipments? Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners? Which insurers are required to participate in the Pennsylvania Automobile Insurance Plan (Assigned Risk Plan)? Which of the following are the authorities that an agent can hold? Which of the following best describes a misrepresentation? Which of the following best describes liberalization clause in a policy? Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? Which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery? Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license? Which of the following definitions best defines the term "accident"? Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis? Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? Which of the following entities must approve all continuing education courses in this state? Which of the following homeowners policies covers those who rent their dwelling? Which of the following insurance options would be considered a risk-sharing arrangement? Which of the following is an example of a protective safeguard in a businessowners policy? Which of the following is an example of an unfair claims settlement practice? Which of the following is defined as a covered cause of loss in businessowners property coverage? Which of the following is defined as the cost to replace damaged property with less expensive and more modern construction or equipment? Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? Which of the following is NOT a goal of risk retention? - To minimize the insured's level of liability in the event of loss Which of the following is NOT an essential element of an insurance contract? Which of the following is NOT an optional coverage available in a businessowners policy? Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? Which of the following is NOT covered under Coverage E - Scheduled Farm Personal Property? Which of the following is NOT found in a commercial package policy? - Certificate of authority Which of the following is NOT true regarding a Certificate of Authority? - It is issued to group insurance participants. Which of the following is the federal body that regulates truckers who travel across state lines? - Federal Motor Carrier Safety Administration Which of the following is the type of property NOT covered by the homeowners policy? Which of the following is true regarding a risk retention group? Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant? Which of the following losses would be covered by an unendorsed homeowners policy? Which of the following may be covered by electronic data processing coverage form under an inland marine policy? Which of the following perils is covered by the HO-2 and HO-3? Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? Which of the following persons is required to hold a producer license? Which of the following policies must contain, at a minimum, policy language equal to the Standard Fire Policy? Which of the following regulatory authorities participated in creating the National Do Not Call Registry? Which of the following risks is eligible for coverage under a businessowners policy? Which of the following risks would NOT be eligible for coverage under a homeowners policy? Which of the following statements is true concerning the special form dwelling policy? Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? Which of the following statements regarding coverage for the flood and earthquake perils is true? Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? Which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis? Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight? Which of the following would be considered an unfair claims settlement practice? Which of the following would be considered false advertising? Which of the following would be covered under the crime coverage inside the premises - theft of money and securities? Which of the following would be included in the farm liability coverage forms? Which of the following would NOT be classified as personal property for insurance purposes? Which of the following would NOT be compensable under Workers Compensation insurance? Which of the following would NOT be considered an exception to the National Do Not Call List? Which of the following would NOT be considered an unfair and deceptive practice? Which of the following would NOT be covered under the liability section of a personal auto policy? Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? Which of the following would the livestock coverage form NOT insure against? Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time? While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? Who is NOT considered an employee in an commercial general liability (CGL) policy? Who will transport the property of anyone who hires them? With regards to a homeowners policy, which coverage provides for indirect or consequential losses? With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?