1|Page
2025 Newest Property and Casualty Exam Prep Test
Bank with 300 Questions and Correct Answers/
Property and Casualty License Test / P & C Exam
Specific insurance - ...✔✔ANSWER✔✔...This type of
insurance designates a particular item to be insured
Blanket insurance - ...✔✔ANSWER✔✔...This type of
insurance covers more than one item of property at a
single location or one more items of property at multiple
locations.
Speculative - ...✔✔ANSWER✔✔...possibility of both gain
and loss. Not insurable.
Pure - ...✔✔ANSWER✔✔...only the possibility of loss.
Insurable.
What are the 5 methods of managing or handling risk? -
...✔✔ANSWER✔✔...avoid, control, retain, and transfer
risk.
Hazard - ...✔✔ANSWER✔✔...A condition or situation
which increases the chance for loss
,2|Page
Physical Hazards - ...✔✔ANSWER✔✔...a hazard that
arises from the condition, occupancy, or use of the
property itself.
ex: skateboard left on the steps
Moral Hazards - ...✔✔ANSWER✔✔...when an individual
through carelessness or by irresponsible actions can
increase the possibly for a loss.
ex: person who drives carelessly just because they know
they are insured.
Morale Hazards - ...✔✔ANSWER✔✔...when a person
might create a loss situation on purpose just to collect
from the insurance company.
ex: Prearranged, faked theft of someone's old vehicle so
they can get an insurance payout to buy a new vehicle.
,3|Page
Replacement Cost - ...✔✔ANSWER✔✔...The amount of
money it would take to replace a damaged or destroyed
item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
Actual Cash Value (ACV) -
...✔✔ANSWER✔✔...Replacement Cost, minus
depreciation.
Pair and Set Clause - ...✔✔ANSWER✔✔...Loss to one item
of a pair or set does not constitute loss to the entire pair
or set.
Appraisal - ...✔✔ANSWER✔✔...A method of resolving
disputes between insurers and insureds over the amount
owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that
will be paid
, 4|Page
Subrogation - ...✔✔ANSWER✔✔...An insurer's right to
recover the amount of its loss payment from the third
party who is legally responsible for the loss.
Arbitration - ...✔✔ANSWER✔✔...this condition is similar
to the Appraisal Condition but it is not limited to disputes
over the value of the loss. It may also be used to resolve
other areas of disagreement between the insured and the
insurance company.
What does WC SHAVVER stand for? -
...✔✔ANSWER✔✔...Windstorm, Civil commotion, Smoke,
Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot
What does BIG AFFECT stand for? -
...✔✔ANSWER✔✔...Burglar damage, Ice & snow weight,
Glass breakage, Accidental discharge, Falling objects,
Freezing of pipes, Electrical damage, Collapse, Tearing
apart.
Insolvency - ...✔✔ANSWER✔✔...A financial state that
occurs if liabilities are greater than assets.
2025 Newest Property and Casualty Exam Prep Test
Bank with 300 Questions and Correct Answers/
Property and Casualty License Test / P & C Exam
Specific insurance - ...✔✔ANSWER✔✔...This type of
insurance designates a particular item to be insured
Blanket insurance - ...✔✔ANSWER✔✔...This type of
insurance covers more than one item of property at a
single location or one more items of property at multiple
locations.
Speculative - ...✔✔ANSWER✔✔...possibility of both gain
and loss. Not insurable.
Pure - ...✔✔ANSWER✔✔...only the possibility of loss.
Insurable.
What are the 5 methods of managing or handling risk? -
...✔✔ANSWER✔✔...avoid, control, retain, and transfer
risk.
Hazard - ...✔✔ANSWER✔✔...A condition or situation
which increases the chance for loss
,2|Page
Physical Hazards - ...✔✔ANSWER✔✔...a hazard that
arises from the condition, occupancy, or use of the
property itself.
ex: skateboard left on the steps
Moral Hazards - ...✔✔ANSWER✔✔...when an individual
through carelessness or by irresponsible actions can
increase the possibly for a loss.
ex: person who drives carelessly just because they know
they are insured.
Morale Hazards - ...✔✔ANSWER✔✔...when a person
might create a loss situation on purpose just to collect
from the insurance company.
ex: Prearranged, faked theft of someone's old vehicle so
they can get an insurance payout to buy a new vehicle.
,3|Page
Replacement Cost - ...✔✔ANSWER✔✔...The amount of
money it would take to replace a damaged or destroyed
item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
Actual Cash Value (ACV) -
...✔✔ANSWER✔✔...Replacement Cost, minus
depreciation.
Pair and Set Clause - ...✔✔ANSWER✔✔...Loss to one item
of a pair or set does not constitute loss to the entire pair
or set.
Appraisal - ...✔✔ANSWER✔✔...A method of resolving
disputes between insurers and insureds over the amount
owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that
will be paid
, 4|Page
Subrogation - ...✔✔ANSWER✔✔...An insurer's right to
recover the amount of its loss payment from the third
party who is legally responsible for the loss.
Arbitration - ...✔✔ANSWER✔✔...this condition is similar
to the Appraisal Condition but it is not limited to disputes
over the value of the loss. It may also be used to resolve
other areas of disagreement between the insured and the
insurance company.
What does WC SHAVVER stand for? -
...✔✔ANSWER✔✔...Windstorm, Civil commotion, Smoke,
Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot
What does BIG AFFECT stand for? -
...✔✔ANSWER✔✔...Burglar damage, Ice & snow weight,
Glass breakage, Accidental discharge, Falling objects,
Freezing of pipes, Electrical damage, Collapse, Tearing
apart.
Insolvency - ...✔✔ANSWER✔✔...A financial state that
occurs if liabilities are greater than assets.
