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CONNECTICUT PROPERTY AND CASUALTY
INSURANCE 2026 EXAM COMPLETE (100)
CURRENT TESTING QUESTIONS AND
CORRECT ANSWERS WITH DETAILED
RATIONALES|GUARANTEED PASS.
INSURANCE
Prepare for the Connecticut Property and Casualty Insurance Exam
with practice questions covering policy types and provisions,
underwriting and claims, Connecticut-specific laws and regulations,
and ethics Section. Designed to improve understanding of property
and casualty insurance principles and boost confidence in licensing
assessments. Suitable for insurance licensing and financial services
candidates.
MULTIPLE CHOICE.
1: Basic Insurance Principles and Concepts (Questions 1–15)
1. Which of the following best describes the primary purpose
of insurance?
A) To eliminate all risks
B) To transfer risk from an individual to an insurer
C) To guarantee a profit for the insured
D) To avoid paying any claims
Answer: B. To transfer risk from an individual to an insurer
Explanation: The primary purpose of insurance is to transfer the
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financial risk of a loss from an individual or business to an
insurer.
2. Which type of risk involves both the possibility of loss and
the possibility of gain, and is generally not insurable?
A) Pure risk
B) Speculative risk
C) Physical hazard
D) Morale hazard
Answer: B. Speculative risk
Explanation: Speculative risks involve the chance of loss or
gain (e.g., gambling or investing) and are not insurable. Pure
risks involve only the chance of loss and are insurable.
3. What is the term for the cause of a loss, such as fire, theft,
or windstorm?
A) Hazard
B) Peril
C) Exposure
D) Loss
Answer: B. Peril
Explanation: A peril is the actual cause of a loss (fire, theft,
wind, etc.). A hazard is a condition that increases the chance of
loss.
4. Which principle of insurance requires the insured to be in
a position to suffer a financial loss if the insured event
occurs?
A) Indemnity
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B) Insurable interest
C) Utmost good faith
D) Subrogation
Answer: B. Insurable interest
Explanation: Insurable interest means the insured would suffer
a financial loss if the property is damaged or destroyed. It must
exist at the time of loss for property insurance.
5. Which principle of insurance means that the insured is
restored to the same financial position after a loss, no better
and no worse?
A) Indemnity
B) Subrogation
C) Contribution
D) Proximate cause
Answer: A. Indemnity
Explanation: Indemnity ensures that the insured is
compensated for the actual loss, not allowed to profit from it.
6. In an insurance contract, “consideration” refers to:
A) The insured’s promise to pay premiums
B) The insurer’s promise to pay claims
C) The exchange of value, such as premiums for coverage
D) The legal purpose of the contract
Answer: C. The exchange of value, such as premiums for
coverage
Explanation: Consideration is the exchange of value between
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the parties: the insured pays premiums, and the insurer
promises to pay for covered losses.
7. Which type of insurance contract has an element of
uncertainty at the beginning; the insurer may pay nothing if
no loss occurs?
A) Unilateral contract
B) Conditional contract
C) Aleatory contract
D) Contract of adhesion
Answer: C. Aleatory contract
Explanation: An aleatory contract has an unequal exchange of
value; the amount paid by the insurer depends on whether a
loss occurs.
8. In an insurance contract, the insurer is the only party
making a legally enforceable promise. This is called:
A) Contract of adhesion
B) Unilateral contract
C) Conditional contract
D) Aleatory contract
Answer: B. Unilateral contract
Explanation: A unilateral contract means only one party (the
insurer) makes an enforceable promise. The insured can cancel
at any time.
9. What type of hazard arises from an insured’s indifferent or
careless attitude toward a loss (e.g., leaving a door unlocked
because they are insured)?
CONNECTICUT PROPERTY AND CASUALTY
INSURANCE 2026 EXAM COMPLETE (100)
CURRENT TESTING QUESTIONS AND
CORRECT ANSWERS WITH DETAILED
RATIONALES|GUARANTEED PASS.
INSURANCE
Prepare for the Connecticut Property and Casualty Insurance Exam
with practice questions covering policy types and provisions,
underwriting and claims, Connecticut-specific laws and regulations,
and ethics Section. Designed to improve understanding of property
and casualty insurance principles and boost confidence in licensing
assessments. Suitable for insurance licensing and financial services
candidates.
MULTIPLE CHOICE.
1: Basic Insurance Principles and Concepts (Questions 1–15)
1. Which of the following best describes the primary purpose
of insurance?
A) To eliminate all risks
B) To transfer risk from an individual to an insurer
C) To guarantee a profit for the insured
D) To avoid paying any claims
Answer: B. To transfer risk from an individual to an insurer
Explanation: The primary purpose of insurance is to transfer the
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financial risk of a loss from an individual or business to an
insurer.
2. Which type of risk involves both the possibility of loss and
the possibility of gain, and is generally not insurable?
A) Pure risk
B) Speculative risk
C) Physical hazard
D) Morale hazard
Answer: B. Speculative risk
Explanation: Speculative risks involve the chance of loss or
gain (e.g., gambling or investing) and are not insurable. Pure
risks involve only the chance of loss and are insurable.
3. What is the term for the cause of a loss, such as fire, theft,
or windstorm?
A) Hazard
B) Peril
C) Exposure
D) Loss
Answer: B. Peril
Explanation: A peril is the actual cause of a loss (fire, theft,
wind, etc.). A hazard is a condition that increases the chance of
loss.
4. Which principle of insurance requires the insured to be in
a position to suffer a financial loss if the insured event
occurs?
A) Indemnity
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B) Insurable interest
C) Utmost good faith
D) Subrogation
Answer: B. Insurable interest
Explanation: Insurable interest means the insured would suffer
a financial loss if the property is damaged or destroyed. It must
exist at the time of loss for property insurance.
5. Which principle of insurance means that the insured is
restored to the same financial position after a loss, no better
and no worse?
A) Indemnity
B) Subrogation
C) Contribution
D) Proximate cause
Answer: A. Indemnity
Explanation: Indemnity ensures that the insured is
compensated for the actual loss, not allowed to profit from it.
6. In an insurance contract, “consideration” refers to:
A) The insured’s promise to pay premiums
B) The insurer’s promise to pay claims
C) The exchange of value, such as premiums for coverage
D) The legal purpose of the contract
Answer: C. The exchange of value, such as premiums for
coverage
Explanation: Consideration is the exchange of value between
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the parties: the insured pays premiums, and the insurer
promises to pay for covered losses.
7. Which type of insurance contract has an element of
uncertainty at the beginning; the insurer may pay nothing if
no loss occurs?
A) Unilateral contract
B) Conditional contract
C) Aleatory contract
D) Contract of adhesion
Answer: C. Aleatory contract
Explanation: An aleatory contract has an unequal exchange of
value; the amount paid by the insurer depends on whether a
loss occurs.
8. In an insurance contract, the insurer is the only party
making a legally enforceable promise. This is called:
A) Contract of adhesion
B) Unilateral contract
C) Conditional contract
D) Aleatory contract
Answer: B. Unilateral contract
Explanation: A unilateral contract means only one party (the
insurer) makes an enforceable promise. The insured can cancel
at any time.
9. What type of hazard arises from an insured’s indifferent or
careless attitude toward a loss (e.g., leaving a door unlocked
because they are insured)?
