1|Page
2025 Newest Property and Casualty Exam Prep Test
Bank with 300 Questions and Correct Answers/
Property and Casualty License Test / P & C Exam
The roof of Robbie's home was badly damaged by hail and
had to be replaced. Fortunately, Robbie's insurance
covered losses caused by hail. In this situation, hail is
a(n):
-hazard
-risk
-exposure
-peril - ...✔✔ANSWER✔✔...Peril
By purchasing an insurance policy, a person manages
risk by
-retaining it
-avoiding it
-transferring it
-controlling it - ...✔✔ANSWER✔✔...Transferring it
Because the Bender Insurance Company insures a large
number of similar convenience stores against fire:
,2|Page
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy
than if it insured only a few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss
control. - ...✔✔ANSWER✔✔...Bender can predict its
losses with much more accuracy than if it insured only a
few stores.
Rory's parents offered to buy him a new car to take to
college, but Rory turned them down because he was
afraid the car would be stolen or damaged if he parked it
on campus. In deciding not to own a car, what risk
management technique did Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention - ...✔✔ANSWER✔✔...Risk Avoidance
RST Insurance Company sells auto insurance only
through the Internet. What type of marketing system does
RST use?
-direct response marketing
,3|Page
-insurance brokers
-the independent agency system
-the exclusive agency system - ...✔✔ANSWER✔✔...Direct
Response Marketing
While giving a speech, the state insurance commissioner
refers to VWX Insurance Company as an alien insurer.
Assuming the description is accurate, where does VWX
Insurance Company have its headquarters? -
...✔✔ANSWER✔✔...Outside the US
Roberto works for an organization that places excess and
surplus lines insurance coverage with nonadmitted
insurers. What is Roberto's employer?
-independent insurance agent
-surplus lines broker
-direct writer
-unauthorized entity - ...✔✔ANSWER✔✔...Surplus Lines
Broker
Emory and a number of other members of his church buy
life insurance from a church-related organization that
, 4|Page
provides insurance to members of a particular religious
body. What kind of organization is it?
-reciprocal insurer
-county mutual
-purchasing group
-fraternal benefit society - ...✔✔ANSWER✔✔...Fraternal
Benefit Society
Cindy and Sandy are insurance producers. Although both
sell auto insurance, Cindy sells policies for several
insurance companies, while Sandy sells policies for one
company. Which statement is correct?
-Cindy is an exclusive producer, and Sandy is an
independent producer.
-Sandy is an exclusive producer, and Cindy is an
independent producer.
-Both are exclusive producers.
-Both are independent producers. -
...✔✔ANSWER✔✔...Sandy is an exclusive producer, and
Cindy is an independent producer.
2025 Newest Property and Casualty Exam Prep Test
Bank with 300 Questions and Correct Answers/
Property and Casualty License Test / P & C Exam
The roof of Robbie's home was badly damaged by hail and
had to be replaced. Fortunately, Robbie's insurance
covered losses caused by hail. In this situation, hail is
a(n):
-hazard
-risk
-exposure
-peril - ...✔✔ANSWER✔✔...Peril
By purchasing an insurance policy, a person manages
risk by
-retaining it
-avoiding it
-transferring it
-controlling it - ...✔✔ANSWER✔✔...Transferring it
Because the Bender Insurance Company insures a large
number of similar convenience stores against fire:
,2|Page
-Bender faces the possibility of a catastrophic loss.
-Bender can predict its losses with much more accuracy
than if it insured only a few stores.
-Bender appears to be a victim of adverse selection.
-Bender is using the risk management technique of loss
control. - ...✔✔ANSWER✔✔...Bender can predict its
losses with much more accuracy than if it insured only a
few stores.
Rory's parents offered to buy him a new car to take to
college, but Rory turned them down because he was
afraid the car would be stolen or damaged if he parked it
on campus. In deciding not to own a car, what risk
management technique did Rory employ?
-risk reduction
-risk retention
-risk avoidance
-risk prevention - ...✔✔ANSWER✔✔...Risk Avoidance
RST Insurance Company sells auto insurance only
through the Internet. What type of marketing system does
RST use?
-direct response marketing
,3|Page
-insurance brokers
-the independent agency system
-the exclusive agency system - ...✔✔ANSWER✔✔...Direct
Response Marketing
While giving a speech, the state insurance commissioner
refers to VWX Insurance Company as an alien insurer.
Assuming the description is accurate, where does VWX
Insurance Company have its headquarters? -
...✔✔ANSWER✔✔...Outside the US
Roberto works for an organization that places excess and
surplus lines insurance coverage with nonadmitted
insurers. What is Roberto's employer?
-independent insurance agent
-surplus lines broker
-direct writer
-unauthorized entity - ...✔✔ANSWER✔✔...Surplus Lines
Broker
Emory and a number of other members of his church buy
life insurance from a church-related organization that
, 4|Page
provides insurance to members of a particular religious
body. What kind of organization is it?
-reciprocal insurer
-county mutual
-purchasing group
-fraternal benefit society - ...✔✔ANSWER✔✔...Fraternal
Benefit Society
Cindy and Sandy are insurance producers. Although both
sell auto insurance, Cindy sells policies for several
insurance companies, while Sandy sells policies for one
company. Which statement is correct?
-Cindy is an exclusive producer, and Sandy is an
independent producer.
-Sandy is an exclusive producer, and Cindy is an
independent producer.
-Both are exclusive producers.
-Both are independent producers. -
...✔✔ANSWER✔✔...Sandy is an exclusive producer, and
Cindy is an independent producer.
