CASUALY AND PROPERTY INSURANCE STUDY GUIDE
REAL EXAM QUESTIONS AND CORRECT ANSWERS
GRADED A+ JUST RELEASED 2025.
(Choose from the following options)
1. Any vehicle not owned by the insured, but furnished for use while the covered auto is out of
normal use because of repair
2. Any vehicle used by the insured without the reasonable belief that the insured is entitled to
use such vehicle
3. Any auto furnished for the insured's regular use, but not named on the policy
4. Any vehicle while located inside a racing facility for the purpose of racing. Answer:1. Any
vehicle not owned by the insured, but furnished for use while the covered auto is out of normal
use because of repair
⫸ 47. A premium discount is the term that describes when an insured owes a total standard
premium greater than
(Choose from the following options)
1. $15,000.
2. $1,000.
3. $5,000.
4. $10,000.. Answer:4. $10,000.
Right Answer
3. $5,000.
Premium discount is when an insured owes a total standard premium greater than 5,000
⫸ 48. Replacement cost coverage is provided in both the broad and special form dwelling
policies when
(Choose from the following options)
,1. The amount of insurance on the dwelling is at least 90% of its replacement cost when the
policy is written.
2. The dwelling is insured for 100% of its replacement cost at the time of a loss.
3. The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of
loss.
4. The amount of insurance on both the dwelling and personal property is at least 80% of its
replacement cost when the policy is written.. Answer:3. The amount of insurance on the
dwelling is at least 80% of its replacement cost at the time of loss.
⫸ 49. When a parent is required to pay for damages caused by his or her children, this is an
example of
(Choose from the following options)
1. Vicarious liability.
2. Strict liability.
3. Intervening cause.
4. Assumption of risk.. Answer:1. Vicarious liability.
⫸ 50. In addition to penalties, fines, and possible imprisonment for violating the provision
relating to misrepresentation, the Commissioner may suspend the license of such person for a
period up to
(Choose from the following options)
1. 6 months.
2. 1 year.
3. 3 years.
4. 5 years.. Answer:3. 3 years.
⫸ 51. Under which of the following circumstances would an insurer be allowed to cancel a
dwelling policy midterm?
(Choose from the following options)
,1. The insured knowingly lied about the year the property was constructed.
2. The insured's claims have exceeded the amount of coverage.
3. The insured wants to make suspicious increases to his or her coverage.
4. The insured reached his or her limit on the number of claims.. Answer:1. The insured
knowingly lied about the year the property was constructed.
⫸ 52. Increased value and excess liability clauses work like which of the following policies?
(Choose from the following options)
1. Umbrella
2. Professional liability
3. Cargo
4. Errors and omissions. Answer:1. Umbrella
⫸ 53. All of the following are additional causes of loss included in the broad form of a
commercial property policy EXCEPT
(Choose from the following options)
1. Weight of ice, snow, or sleet.
2. Water damage.
3. Replacement cost.
4. Falling objects.. Answer:3. Replacement cost.
⫸ 54. The Standard Fire Policy would provide coverage in which of these cases?
(Choose from the following options)
1. Insured's neglect
2. Fire
3. Acts of war
, 4. Theft. Answer:2. Fire
⫸ Any person who claims that he or she meets the criteria based on a driver's license and driving
experience acquired anywhere other than in the United States or Canada is presumed to be qualified
to purchase a Good Driver Discount policy if that person has been licensed to drive in the United
States or Canada and meets the criteria for that period for at least the previous. Answer:18 months
⫸ Which of the following risks would NOT be eligible for coverage under a homeowners policy?.
Answer:An applicant who owns and lives on a commercial farm
⫸ In the Personal Auto Policy, owned trailers being towed by an insured auto are automatically
covered for. Answer:Uninsured motorists
⫸ The standard fire policy only covers those perils specified in the policy for that reason it is known
as a(n):. Answer:Named peril property
⫸ Which of the following is NOT a goal of risk retention?. Answer:To minimize the insured's level of
liability in the event of loss
⫸ Which policy condition in HO policies states that insurance applies separately to each insured?.
Answer:Severability of insurance
⫸ All of the following statements concerning coinsurance are true, EXCEPT. Answer:The coinsurance
formula also will be applied to total losses.
⫸ Pete wants to have separate insurance coverage for separate acreages. What kind of insurance
should Pete get?. Answer:Unit insurance
⫸ Assuming the insurer and the insured agree to the amount payable for a loss covered under a
dwelling policy, how soon after the insurer has received proof of loss must it make payment?.
Answer:60 days
⫸ In property and casualty insurance, insurable interest is defined as the right of a person or entity
to property in that such a loss to that property would cause a direct monetary loss to the person or
entity. Which of the following statements is TRUE regarding insurable interest in property and
casualty insurance?. Answer:If the insured has no insurable interest, the contract is void.
REAL EXAM QUESTIONS AND CORRECT ANSWERS
GRADED A+ JUST RELEASED 2025.
(Choose from the following options)
1. Any vehicle not owned by the insured, but furnished for use while the covered auto is out of
normal use because of repair
2. Any vehicle used by the insured without the reasonable belief that the insured is entitled to
use such vehicle
3. Any auto furnished for the insured's regular use, but not named on the policy
4. Any vehicle while located inside a racing facility for the purpose of racing. Answer:1. Any
vehicle not owned by the insured, but furnished for use while the covered auto is out of normal
use because of repair
⫸ 47. A premium discount is the term that describes when an insured owes a total standard
premium greater than
(Choose from the following options)
1. $15,000.
2. $1,000.
3. $5,000.
4. $10,000.. Answer:4. $10,000.
Right Answer
3. $5,000.
Premium discount is when an insured owes a total standard premium greater than 5,000
⫸ 48. Replacement cost coverage is provided in both the broad and special form dwelling
policies when
(Choose from the following options)
,1. The amount of insurance on the dwelling is at least 90% of its replacement cost when the
policy is written.
2. The dwelling is insured for 100% of its replacement cost at the time of a loss.
3. The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of
loss.
4. The amount of insurance on both the dwelling and personal property is at least 80% of its
replacement cost when the policy is written.. Answer:3. The amount of insurance on the
dwelling is at least 80% of its replacement cost at the time of loss.
⫸ 49. When a parent is required to pay for damages caused by his or her children, this is an
example of
(Choose from the following options)
1. Vicarious liability.
2. Strict liability.
3. Intervening cause.
4. Assumption of risk.. Answer:1. Vicarious liability.
⫸ 50. In addition to penalties, fines, and possible imprisonment for violating the provision
relating to misrepresentation, the Commissioner may suspend the license of such person for a
period up to
(Choose from the following options)
1. 6 months.
2. 1 year.
3. 3 years.
4. 5 years.. Answer:3. 3 years.
⫸ 51. Under which of the following circumstances would an insurer be allowed to cancel a
dwelling policy midterm?
(Choose from the following options)
,1. The insured knowingly lied about the year the property was constructed.
2. The insured's claims have exceeded the amount of coverage.
3. The insured wants to make suspicious increases to his or her coverage.
4. The insured reached his or her limit on the number of claims.. Answer:1. The insured
knowingly lied about the year the property was constructed.
⫸ 52. Increased value and excess liability clauses work like which of the following policies?
(Choose from the following options)
1. Umbrella
2. Professional liability
3. Cargo
4. Errors and omissions. Answer:1. Umbrella
⫸ 53. All of the following are additional causes of loss included in the broad form of a
commercial property policy EXCEPT
(Choose from the following options)
1. Weight of ice, snow, or sleet.
2. Water damage.
3. Replacement cost.
4. Falling objects.. Answer:3. Replacement cost.
⫸ 54. The Standard Fire Policy would provide coverage in which of these cases?
(Choose from the following options)
1. Insured's neglect
2. Fire
3. Acts of war
, 4. Theft. Answer:2. Fire
⫸ Any person who claims that he or she meets the criteria based on a driver's license and driving
experience acquired anywhere other than in the United States or Canada is presumed to be qualified
to purchase a Good Driver Discount policy if that person has been licensed to drive in the United
States or Canada and meets the criteria for that period for at least the previous. Answer:18 months
⫸ Which of the following risks would NOT be eligible for coverage under a homeowners policy?.
Answer:An applicant who owns and lives on a commercial farm
⫸ In the Personal Auto Policy, owned trailers being towed by an insured auto are automatically
covered for. Answer:Uninsured motorists
⫸ The standard fire policy only covers those perils specified in the policy for that reason it is known
as a(n):. Answer:Named peril property
⫸ Which of the following is NOT a goal of risk retention?. Answer:To minimize the insured's level of
liability in the event of loss
⫸ Which policy condition in HO policies states that insurance applies separately to each insured?.
Answer:Severability of insurance
⫸ All of the following statements concerning coinsurance are true, EXCEPT. Answer:The coinsurance
formula also will be applied to total losses.
⫸ Pete wants to have separate insurance coverage for separate acreages. What kind of insurance
should Pete get?. Answer:Unit insurance
⫸ Assuming the insurer and the insured agree to the amount payable for a loss covered under a
dwelling policy, how soon after the insurer has received proof of loss must it make payment?.
Answer:60 days
⫸ In property and casualty insurance, insurable interest is defined as the right of a person or entity
to property in that such a loss to that property would cause a direct monetary loss to the person or
entity. Which of the following statements is TRUE regarding insurable interest in property and
casualty insurance?. Answer:If the insured has no insurable interest, the contract is void.
