SOUTH CAROLINA PROPERTY AND CASUALTY
INSURANCE EXAM QUESTIONS & CORRECT
ANSWERS
1. What is the primary purpose of insurance?
A. To reduce the likelihood of loss
B. To eliminate risk
C. To transfer risk
D. To create financial dependence
Answer: C
Explanation: Insurance transfers the financial risk of loss from an
individual or business to an insurance company.
2. Which of the following is NOT an element of an insurable risk?
A. The loss must be accidental
B. The risk must be catastrophic
C. The loss must be measurable
D. The loss must be predictable
Answer: B
Explanation: Insurers avoid catastrophic risks (like war or nuclear
events) because they affect large numbers at once.
Property Insurance – Dwelling & Homeowners
3. Which HO policy form provides open perils coverage on both
the dwelling and personal property?
A. HO-2
B. HO-3
C. HO-5
,D. HO-8
Answer: C
Explanation: HO-5 provides open (all-risk) coverage for both the
dwelling and personal property.
4. Which of the following is covered under Coverage B –
Other Structures in a homeowners policy?
A. The house
B. A detached garage
C. Personal belongings
D. Loss of use
Answer: B
Explanation: Coverage B covers structures not attached to the main
dwelling, like detached garages or sheds.
5. What is the coinsurance formula?
A. (Insurance Carried / Insurance Required) x Loss
B. (Insurance Required / Insurance Carried) x Loss
C. Deductible x Coinsurance %
D. Replacement Cost – Actual Cash Value
Answer: A
Explanation: Coinsurance is calculated as (Insurance Carried ÷
Insurance Required) × Loss.
Casualty Insurance – Liability
6. Liability insurance covers which of the following?
A. Injuries to the insured
B. Property damage to the insured’s property
C. Injuries to others caused by the insured
,D. The insured’s medical bills
Answer: C
Explanation: Liability insurance pays for injuries or damages the
insured causes to others.
7. Which limit is defined as the maximum paid per occurrence
regardless of the number of claims?
A. Aggregate limit
B. Per person limit
C. Split limit
D. Per occurrence limit
Answer: D
Explanation: A per occurrence limit is the max amount the insurer
will pay for all claims resulting from a single event.
Commercial Policies
8. What is covered under the Building and Personal Property (BPP)
form?
A. Personal property of others only
B. Only inventory
C. The building, business personal property, and personal property of
others
D. Only the building structure
Answer: C
Explanation: BPP covers the building, the insured’s business
personal property, and the personal property of others.
9. What does the Commercial General Liability (CGL) policy cover?
A. Property damage only
, B. Personal injuries only
C. Bodily injury, property damage, personal and advertising injury
D. Employee injuries
Answer: C
Explanation: CGL covers liability from bodily injury, property damage, and
personal/advertising injury.
Auto Insurance
10. What coverage would pay for the insured's injuries in an
accident where the other driver has no insurance?
A. Liability coverage
B. Medical payments
C. Uninsured motorist
D. Collision
Answer: C
Explanation: Uninsured motorist coverage pays for bodily injury
caused by an uninsured driver.
11. South Carolina law requires what minimum auto liability limits?
A. 15/30/10
B. 25/50/25
C. 30/60/15
D. 50/100/50
Answer: B
Explanation: South Carolina requires minimum liability limits of
$25,000 per person, $50,000 per accident for bodily injury, and
$25,000 for property damage.
Workers’ Compensation
INSURANCE EXAM QUESTIONS & CORRECT
ANSWERS
1. What is the primary purpose of insurance?
A. To reduce the likelihood of loss
B. To eliminate risk
C. To transfer risk
D. To create financial dependence
Answer: C
Explanation: Insurance transfers the financial risk of loss from an
individual or business to an insurance company.
2. Which of the following is NOT an element of an insurable risk?
A. The loss must be accidental
B. The risk must be catastrophic
C. The loss must be measurable
D. The loss must be predictable
Answer: B
Explanation: Insurers avoid catastrophic risks (like war or nuclear
events) because they affect large numbers at once.
Property Insurance – Dwelling & Homeowners
3. Which HO policy form provides open perils coverage on both
the dwelling and personal property?
A. HO-2
B. HO-3
C. HO-5
,D. HO-8
Answer: C
Explanation: HO-5 provides open (all-risk) coverage for both the
dwelling and personal property.
4. Which of the following is covered under Coverage B –
Other Structures in a homeowners policy?
A. The house
B. A detached garage
C. Personal belongings
D. Loss of use
Answer: B
Explanation: Coverage B covers structures not attached to the main
dwelling, like detached garages or sheds.
5. What is the coinsurance formula?
A. (Insurance Carried / Insurance Required) x Loss
B. (Insurance Required / Insurance Carried) x Loss
C. Deductible x Coinsurance %
D. Replacement Cost – Actual Cash Value
Answer: A
Explanation: Coinsurance is calculated as (Insurance Carried ÷
Insurance Required) × Loss.
Casualty Insurance – Liability
6. Liability insurance covers which of the following?
A. Injuries to the insured
B. Property damage to the insured’s property
C. Injuries to others caused by the insured
,D. The insured’s medical bills
Answer: C
Explanation: Liability insurance pays for injuries or damages the
insured causes to others.
7. Which limit is defined as the maximum paid per occurrence
regardless of the number of claims?
A. Aggregate limit
B. Per person limit
C. Split limit
D. Per occurrence limit
Answer: D
Explanation: A per occurrence limit is the max amount the insurer
will pay for all claims resulting from a single event.
Commercial Policies
8. What is covered under the Building and Personal Property (BPP)
form?
A. Personal property of others only
B. Only inventory
C. The building, business personal property, and personal property of
others
D. Only the building structure
Answer: C
Explanation: BPP covers the building, the insured’s business
personal property, and the personal property of others.
9. What does the Commercial General Liability (CGL) policy cover?
A. Property damage only
, B. Personal injuries only
C. Bodily injury, property damage, personal and advertising injury
D. Employee injuries
Answer: C
Explanation: CGL covers liability from bodily injury, property damage, and
personal/advertising injury.
Auto Insurance
10. What coverage would pay for the insured's injuries in an
accident where the other driver has no insurance?
A. Liability coverage
B. Medical payments
C. Uninsured motorist
D. Collision
Answer: C
Explanation: Uninsured motorist coverage pays for bodily injury
caused by an uninsured driver.
11. South Carolina law requires what minimum auto liability limits?
A. 15/30/10
B. 25/50/25
C. 30/60/15
D. 50/100/50
Answer: B
Explanation: South Carolina requires minimum liability limits of
$25,000 per person, $50,000 per accident for bodily injury, and
$25,000 for property damage.
Workers’ Compensation
