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Nebraska Property & Casualty (P&C) Insurance
Producer Licensing Examination | Latest Verified
Questions and Detailed Answers
OVERVIEW DESCRIPTION:
This comprehensive set of multiple-choice questions is designed for the Nebraska Property
& Casualty Insurance Producer Exam. It covers core topics including Nebraska-specific
laws and regulations (cancellation notices, unfair trade practices, guaranty association,
producer licensing), personal lines (auto and homeowners’ policies, coverages, exclusions,
limits), commercial lines (CGL, BOP, commercial property, crime, workers’ compensation),
insurance principles (indemnity, subrogation, insurable interest, proximate cause), and
ethics. Each question includes a correct answer and a short expert rationale to reinforce
key concepts.
QUESTION 1
An insured intentionally sets fire to their own commercial building to collect the
insurance proceeds. Under a standard property policy, what is the likely outcome?
A) The policy will pay the claim but then cancel the insured
B) The policy will pay only the actual cash value
C) The policy will deny coverage due to intentional act
D) The policy will pay 50% of the loss as a penalty
CORRECT ANSWER: C
EXPERT RATIONALE: Intentional loss caused by the insured is excluded under virtually all
property insurance policies as a matter of public policy. Allowing recovery would
encourage fraud and violate the principle of indemnity.
QUESTION 2
In Nebraska, which of the following is NOT a required condition for a producer license
renewal?
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A) Completion of continuing education hours
B) Payment of the renewal fee
C) Passing a new licensing exam every two years
D) No administrative action or license suspension
CORRECT ANSWER: C
EXPERT RATIONALE: Nebraska does not require a new licensing exam at each renewal;
instead, licensees must complete continuing education and pay fees. The exam is a one-
time initial requirement unless the license lapses for an extended period.
QUESTION 3
A driver in Omaha causes an accident that results in $15,000 of property damage to
another vehicle. The driver has a Nebraska auto policy with split limits of 25/50/15. How
much will the policy pay for the property damage?
A) $15,000
B) $25,000
C) $10,000
D) $0
CORRECT ANSWER: A
EXPERT RATIONALE: Split limits 25/50/15 means $25,000 bodily injury per person,
$50,000 total per accident, and $15,000 property damage per accident. The policy pays
up to the property damage limit of $15,000.
QUESTION 4
Under Nebraska's Unfair Trade Practices Act, which action is considered an unfair
discriminatory practice?
A) Refusing to insure a home due to its poor condition
B) Charging different premium rates based on actual loss experience
C) Canceling a policy for nonpayment of premium
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D) Using marital status to refuse coverage without actuarial justification
CORRECT ANSWER: D
EXPERT RATIONALE: Nebraska law prohibits unfair discrimination based on marital
status, race, religion, or other factors not supported by actuarial data. Using marital
status alone to deny coverage is a prohibited practice.
QUESTION 5
What is the primary purpose of the "insuring agreement" in a property and casualty
insurance policy?
A) To list exclusions from coverage
B) To state the duties of the insured after a loss
C) To describe the perils insured against and the scope of coverage
D) To define the policy term and cancellation conditions
CORRECT ANSWER: C
EXPERT RATIONALE: The insuring agreement is the core promise by the insurer to pay
for covered losses, specifying which perils and property are covered. It sets the basic
scope of protection.
QUESTION 6
A Nebraska farmer wants to insure their harvested grain stored in a commercial elevator.
Which type of inland marine form would be most appropriate?
A) Bailee's customer policy
B) Crop hail policy
C) Grain floater
D) Equipment breakdown policy
CORRECT ANSWER: C
EXPERT RATIONALE: A grain floater is an inland marine policy designed to cover grain in
transit or stored at elevators. It provides all-risk coverage for the specific commodity.
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QUESTION 7
In a commercial general liability (CGL) policy, which of the following is covered under
Products-Completed Operations Hazard?
A) Injury caused by a tool still in the insured's factory
B) Damage from a defective product sold and installed one year ago
C) Injury to an employee during manufacturing
D) Pollution from a completed building
CORRECT ANSWER: B
EXPERT RATIONALE: Products-Completed Operations Hazard covers bodily injury or
property damage arising out of the insured's product or work after it has been
completed or sold. The defective product causing damage a year later is within that
coverage.
QUESTION 8
An Nebraska insured has a Homeowners HO-3 policy. A windstorm damages the roof,
causing rain to enter and ruin the carpet. How will the policy respond?
A) Covers only the roof damage
B) Covers only the carpet damage
C) Covers both the roof and carpet damage
D) Covers neither because wind is excluded
CORRECT ANSWER: C
EXPERT RATIONALE: HO-3 is an open perils policy on the dwelling, covering windstorm
unless excluded. Ensuing water damage from a covered peril (windstorm) is also
covered.
QUESTION 9
Which of the following is a mandatory provision in Nebraska auto insurance policies
regarding uninsured motorist coverage?
Nebraska Property & Casualty (P&C) Insurance
Producer Licensing Examination | Latest Verified
Questions and Detailed Answers
OVERVIEW DESCRIPTION:
This comprehensive set of multiple-choice questions is designed for the Nebraska Property
& Casualty Insurance Producer Exam. It covers core topics including Nebraska-specific
laws and regulations (cancellation notices, unfair trade practices, guaranty association,
producer licensing), personal lines (auto and homeowners’ policies, coverages, exclusions,
limits), commercial lines (CGL, BOP, commercial property, crime, workers’ compensation),
insurance principles (indemnity, subrogation, insurable interest, proximate cause), and
ethics. Each question includes a correct answer and a short expert rationale to reinforce
key concepts.
QUESTION 1
An insured intentionally sets fire to their own commercial building to collect the
insurance proceeds. Under a standard property policy, what is the likely outcome?
A) The policy will pay the claim but then cancel the insured
B) The policy will pay only the actual cash value
C) The policy will deny coverage due to intentional act
D) The policy will pay 50% of the loss as a penalty
CORRECT ANSWER: C
EXPERT RATIONALE: Intentional loss caused by the insured is excluded under virtually all
property insurance policies as a matter of public policy. Allowing recovery would
encourage fraud and violate the principle of indemnity.
QUESTION 2
In Nebraska, which of the following is NOT a required condition for a producer license
renewal?
,2|Page
A) Completion of continuing education hours
B) Payment of the renewal fee
C) Passing a new licensing exam every two years
D) No administrative action or license suspension
CORRECT ANSWER: C
EXPERT RATIONALE: Nebraska does not require a new licensing exam at each renewal;
instead, licensees must complete continuing education and pay fees. The exam is a one-
time initial requirement unless the license lapses for an extended period.
QUESTION 3
A driver in Omaha causes an accident that results in $15,000 of property damage to
another vehicle. The driver has a Nebraska auto policy with split limits of 25/50/15. How
much will the policy pay for the property damage?
A) $15,000
B) $25,000
C) $10,000
D) $0
CORRECT ANSWER: A
EXPERT RATIONALE: Split limits 25/50/15 means $25,000 bodily injury per person,
$50,000 total per accident, and $15,000 property damage per accident. The policy pays
up to the property damage limit of $15,000.
QUESTION 4
Under Nebraska's Unfair Trade Practices Act, which action is considered an unfair
discriminatory practice?
A) Refusing to insure a home due to its poor condition
B) Charging different premium rates based on actual loss experience
C) Canceling a policy for nonpayment of premium
,3|Page
D) Using marital status to refuse coverage without actuarial justification
CORRECT ANSWER: D
EXPERT RATIONALE: Nebraska law prohibits unfair discrimination based on marital
status, race, religion, or other factors not supported by actuarial data. Using marital
status alone to deny coverage is a prohibited practice.
QUESTION 5
What is the primary purpose of the "insuring agreement" in a property and casualty
insurance policy?
A) To list exclusions from coverage
B) To state the duties of the insured after a loss
C) To describe the perils insured against and the scope of coverage
D) To define the policy term and cancellation conditions
CORRECT ANSWER: C
EXPERT RATIONALE: The insuring agreement is the core promise by the insurer to pay
for covered losses, specifying which perils and property are covered. It sets the basic
scope of protection.
QUESTION 6
A Nebraska farmer wants to insure their harvested grain stored in a commercial elevator.
Which type of inland marine form would be most appropriate?
A) Bailee's customer policy
B) Crop hail policy
C) Grain floater
D) Equipment breakdown policy
CORRECT ANSWER: C
EXPERT RATIONALE: A grain floater is an inland marine policy designed to cover grain in
transit or stored at elevators. It provides all-risk coverage for the specific commodity.
, 4|Page
QUESTION 7
In a commercial general liability (CGL) policy, which of the following is covered under
Products-Completed Operations Hazard?
A) Injury caused by a tool still in the insured's factory
B) Damage from a defective product sold and installed one year ago
C) Injury to an employee during manufacturing
D) Pollution from a completed building
CORRECT ANSWER: B
EXPERT RATIONALE: Products-Completed Operations Hazard covers bodily injury or
property damage arising out of the insured's product or work after it has been
completed or sold. The defective product causing damage a year later is within that
coverage.
QUESTION 8
An Nebraska insured has a Homeowners HO-3 policy. A windstorm damages the roof,
causing rain to enter and ruin the carpet. How will the policy respond?
A) Covers only the roof damage
B) Covers only the carpet damage
C) Covers both the roof and carpet damage
D) Covers neither because wind is excluded
CORRECT ANSWER: C
EXPERT RATIONALE: HO-3 is an open perils policy on the dwelling, covering windstorm
unless excluded. Ensuing water damage from a covered peril (windstorm) is also
covered.
QUESTION 9
Which of the following is a mandatory provision in Nebraska auto insurance policies
regarding uninsured motorist coverage?
