PROPERTY AND CASUALTY INSURANCE LICENSING
EXAMINATION NEWEST 2025 – 2026 QUESTIONS FROM
PAST PAPERS ACTUAL EXAMS COMPLETE 100
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND
NEW!!
Content Covered (Most Tested Areas from the Official Licensing Exam
Syllabus):
Insurance Basics and Principles • Property Insurance Policies •
Casualty and Liability Insurance • Personal Auto Policy • Homeowners
Insurance • Commercial Property • Commercial Liability • Policy
Conditions and Provisions • Risk Management • Insurance Regulations
and Concepts
1. Which principle of insurance states that an insured should not profit from
an insurance loss?
A. Risk Retention
B. Indemnity
C. Subrogation
D. Contribution
Answer: B. Indemnity
Indemnity means the insured should be restored to approximately the same
financial condition that existed before the loss, without gaining a profit.
2. What is the main purpose of insurance?
,A. Investment growth
B. Risk transfer
C. Risk elimination
D. Loss elimination
Answer: B. Risk transfer
Insurance transfers the financial risk of loss from an individual or business to an
insurance company in exchange for a premium.
3. Which term describes the person or entity covered by an insurance policy?
A. Insurer
B. Beneficiary
C. Insured
D. Agent
Answer: C. Insured
The insured is the person or organization protected under the policy.
4. A peril is best defined as:
A. A cause of loss
B. A condition increasing risk
C. A premium amount
D. A deductible
Answer: A. A cause of loss
Examples of perils include fire, theft, and windstorm—events that cause damage
or loss.
5. Which of the following is an example of a physical hazard?
A. Dishonesty
B. Carelessness
C. Flammable materials stored improperly
D. Gambling
,Answer: C. Flammable materials stored improperly
Physical hazards arise from physical conditions that increase the chance of loss.
6. What is the deductible in an insurance policy?
A. The amount paid by the insurer
B. The portion of loss paid by the insured
C. A policy premium
D. A coverage limit
Answer: B. The portion of loss paid by the insured
The deductible is the amount the insured must pay before the insurer pays the
remaining covered loss.
7. Which homeowners policy form provides the broadest coverage for
homeowners?
A. HO-2
B. HO-3
C. HO-5
D. HO-8
Answer: C. HO-5
HO-5 policies provide open-peril coverage for both the dwelling and personal
property, offering the broadest protection.
8. What type of policy covers named perils only?
A. Open-peril policy
B. Named-peril policy
C. Replacement policy
D. Liability policy
Answer: B. Named-peril policy
Named-peril policies only cover losses specifically listed in the policy.
9. Liability insurance primarily protects against:
, A. Property damage only
B. Legal responsibility for injuries or damage to others
C. Theft of personal property
D. Flood losses
Answer: B. Legal responsibility for injuries or damage to others
Liability coverage pays for damages and legal costs when the insured is
responsible for injury or damage to another person.
10.Which coverage protects a driver if the at-fault driver has no insurance?
A. Collision coverage
B. Medical payments coverage
C. Uninsured motorist coverage
D. Comprehensive coverage
Answer: C. Uninsured motorist coverage
Uninsured motorist coverage protects insured drivers when an accident is caused
by someone without insurance.
11.Comprehensive coverage in an auto policy covers damage caused by:
A. Collision with another vehicle
B. Collision with a building
C. Theft, fire, or vandalism
D. Reckless driving
Answer: C. Theft, fire, or vandalism
Comprehensive coverage protects against non-collision losses such as theft, fire,
hail, or vandalism.
12.Collision coverage pays for damage to:
A. Another driver’s vehicle
B. The insured’s vehicle after impact
C. Medical bills only
D. Property inside the car
EXAMINATION NEWEST 2025 – 2026 QUESTIONS FROM
PAST PAPERS ACTUAL EXAMS COMPLETE 100
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND
NEW!!
Content Covered (Most Tested Areas from the Official Licensing Exam
Syllabus):
Insurance Basics and Principles • Property Insurance Policies •
Casualty and Liability Insurance • Personal Auto Policy • Homeowners
Insurance • Commercial Property • Commercial Liability • Policy
Conditions and Provisions • Risk Management • Insurance Regulations
and Concepts
1. Which principle of insurance states that an insured should not profit from
an insurance loss?
A. Risk Retention
B. Indemnity
C. Subrogation
D. Contribution
Answer: B. Indemnity
Indemnity means the insured should be restored to approximately the same
financial condition that existed before the loss, without gaining a profit.
2. What is the main purpose of insurance?
,A. Investment growth
B. Risk transfer
C. Risk elimination
D. Loss elimination
Answer: B. Risk transfer
Insurance transfers the financial risk of loss from an individual or business to an
insurance company in exchange for a premium.
3. Which term describes the person or entity covered by an insurance policy?
A. Insurer
B. Beneficiary
C. Insured
D. Agent
Answer: C. Insured
The insured is the person or organization protected under the policy.
4. A peril is best defined as:
A. A cause of loss
B. A condition increasing risk
C. A premium amount
D. A deductible
Answer: A. A cause of loss
Examples of perils include fire, theft, and windstorm—events that cause damage
or loss.
5. Which of the following is an example of a physical hazard?
A. Dishonesty
B. Carelessness
C. Flammable materials stored improperly
D. Gambling
,Answer: C. Flammable materials stored improperly
Physical hazards arise from physical conditions that increase the chance of loss.
6. What is the deductible in an insurance policy?
A. The amount paid by the insurer
B. The portion of loss paid by the insured
C. A policy premium
D. A coverage limit
Answer: B. The portion of loss paid by the insured
The deductible is the amount the insured must pay before the insurer pays the
remaining covered loss.
7. Which homeowners policy form provides the broadest coverage for
homeowners?
A. HO-2
B. HO-3
C. HO-5
D. HO-8
Answer: C. HO-5
HO-5 policies provide open-peril coverage for both the dwelling and personal
property, offering the broadest protection.
8. What type of policy covers named perils only?
A. Open-peril policy
B. Named-peril policy
C. Replacement policy
D. Liability policy
Answer: B. Named-peril policy
Named-peril policies only cover losses specifically listed in the policy.
9. Liability insurance primarily protects against:
, A. Property damage only
B. Legal responsibility for injuries or damage to others
C. Theft of personal property
D. Flood losses
Answer: B. Legal responsibility for injuries or damage to others
Liability coverage pays for damages and legal costs when the insured is
responsible for injury or damage to another person.
10.Which coverage protects a driver if the at-fault driver has no insurance?
A. Collision coverage
B. Medical payments coverage
C. Uninsured motorist coverage
D. Comprehensive coverage
Answer: C. Uninsured motorist coverage
Uninsured motorist coverage protects insured drivers when an accident is caused
by someone without insurance.
11.Comprehensive coverage in an auto policy covers damage caused by:
A. Collision with another vehicle
B. Collision with a building
C. Theft, fire, or vandalism
D. Reckless driving
Answer: C. Theft, fire, or vandalism
Comprehensive coverage protects against non-collision losses such as theft, fire,
hail, or vandalism.
12.Collision coverage pays for damage to:
A. Another driver’s vehicle
B. The insured’s vehicle after impact
C. Medical bills only
D. Property inside the car
