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Property and Casualty Insurance Exam with 280
Practice Questions and Answers/ P & C License
Test 2025 Prep Qs and As/ P and C Insurance
General Qs
Insurance - ...✔✔ANSWER✔✔...The transfer of risk
through a legal contract
Property - ...✔✔ANSWER✔✔...Covers real property and
personal property against damage or loss resulting from
covered causes of loss called perils
casualty - ...✔✔ANSWER✔✔...covers non-property losses
(3rd Party)
Personal lines - ...✔✔ANSWER✔✔...Insurance for families
and individuals
Commercial Lines - ...✔✔ANSWER✔✔...Insurance for
Business
Risk - ...✔✔ANSWER✔✔...Uncertainty of financial loss
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Pure Risk - ...✔✔ANSWER✔✔...Chance of loss only
(insurance only covers)
Speculative Risk - ...✔✔ANSWER✔✔...Chance of loss or
gain
law of large numbers - ...✔✔ANSWER✔✔...as the number
of homogenous loss exposures increases, the more
accurate claims can be predicted from the group
Perils - ...✔✔ANSWER✔✔...causes a loss
Named Peril - ...✔✔ANSWER✔✔...lists the perils that are
covered
open peril - ...✔✔ANSWER✔✔...cover all perils except
those specifically excluded by the policy
hazard - ...✔✔ANSWER✔✔...Are not causes of loss but
are things that increase the chance of a peril happening.
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Physical Hazard - ...✔✔ANSWER✔✔...something you can
physically look at
Moral Hazard - ...✔✔ANSWER✔✔...dishonest tendencies
morale hazard - ...✔✔ANSWER✔✔...attitude of
carelessness
Direct Loss - ...✔✔ANSWER✔✔...immediate physical
damage to property
indirect loss - ...✔✔ANSWER✔✔...loss that happens after
the direct loss but due to the loss of use of the property.
Also called consequential
proximate cause - ...✔✔ANSWER✔✔...the first cause in an
unbroken chain of events
Elements of a legal contract -
...✔✔ANSWER✔✔...Competent parties, Agreement, Legal
Purpose, consideration
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Binder - ...✔✔ANSWER✔✔...temporary contract of
insurance. Pending issue of the policy, good for 30 days
DICEE - ...✔✔ANSWER✔✔...5 major parts to an insurance
policy
Insuring Agreement - ...✔✔ANSWER✔✔...Promise to Pay,
Perils, Liability
Conditions - ...✔✔ANSWER✔✔...Rules of the Game,
Insured's duties in a loss, Insurer's subrogation rights,
mortgagees rights
Direct Liability - ...✔✔ANSWER✔✔...Insured is the
wrongdoer
Vicarious Liability - ...✔✔ANSWER✔✔...insured is
responsible for actions of wrongdoer
contractual liability - ...✔✔ANSWER✔✔...insured assumes
another's liability under a written agreement
Property and Casualty Insurance Exam with 280
Practice Questions and Answers/ P & C License
Test 2025 Prep Qs and As/ P and C Insurance
General Qs
Insurance - ...✔✔ANSWER✔✔...The transfer of risk
through a legal contract
Property - ...✔✔ANSWER✔✔...Covers real property and
personal property against damage or loss resulting from
covered causes of loss called perils
casualty - ...✔✔ANSWER✔✔...covers non-property losses
(3rd Party)
Personal lines - ...✔✔ANSWER✔✔...Insurance for families
and individuals
Commercial Lines - ...✔✔ANSWER✔✔...Insurance for
Business
Risk - ...✔✔ANSWER✔✔...Uncertainty of financial loss
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Pure Risk - ...✔✔ANSWER✔✔...Chance of loss only
(insurance only covers)
Speculative Risk - ...✔✔ANSWER✔✔...Chance of loss or
gain
law of large numbers - ...✔✔ANSWER✔✔...as the number
of homogenous loss exposures increases, the more
accurate claims can be predicted from the group
Perils - ...✔✔ANSWER✔✔...causes a loss
Named Peril - ...✔✔ANSWER✔✔...lists the perils that are
covered
open peril - ...✔✔ANSWER✔✔...cover all perils except
those specifically excluded by the policy
hazard - ...✔✔ANSWER✔✔...Are not causes of loss but
are things that increase the chance of a peril happening.
,3|Page
Physical Hazard - ...✔✔ANSWER✔✔...something you can
physically look at
Moral Hazard - ...✔✔ANSWER✔✔...dishonest tendencies
morale hazard - ...✔✔ANSWER✔✔...attitude of
carelessness
Direct Loss - ...✔✔ANSWER✔✔...immediate physical
damage to property
indirect loss - ...✔✔ANSWER✔✔...loss that happens after
the direct loss but due to the loss of use of the property.
Also called consequential
proximate cause - ...✔✔ANSWER✔✔...the first cause in an
unbroken chain of events
Elements of a legal contract -
...✔✔ANSWER✔✔...Competent parties, Agreement, Legal
Purpose, consideration
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Binder - ...✔✔ANSWER✔✔...temporary contract of
insurance. Pending issue of the policy, good for 30 days
DICEE - ...✔✔ANSWER✔✔...5 major parts to an insurance
policy
Insuring Agreement - ...✔✔ANSWER✔✔...Promise to Pay,
Perils, Liability
Conditions - ...✔✔ANSWER✔✔...Rules of the Game,
Insured's duties in a loss, Insurer's subrogation rights,
mortgagees rights
Direct Liability - ...✔✔ANSWER✔✔...Insured is the
wrongdoer
Vicarious Liability - ...✔✔ANSWER✔✔...insured is
responsible for actions of wrongdoer
contractual liability - ...✔✔ANSWER✔✔...insured assumes
another's liability under a written agreement
