Named PerilP&C producer exam prep

Practice testall coverage lines

Items50

Verdictafter every answer

Property and casualty practice test

This free property and casualty practice test draws on all three coverage lines: foundations, personal lines and commercial lines. Answer an item and the verdict opens with a note on every option, the key's reason and what each wrong option confuses.

Mixed set across the three lines

0 answered · 0 right · 50 in this set

Leave it on all lines or filter to one with the buttons. Each new batch loads below the last; the tally lasts until you reload the page.

Notes on each optionCommit to an answer first. The notes under the item then open on every option: what rules it in or out, and the one word that splits the runner-up from the key.

  1. Item 01Liability insurance basics

    A jury awards an injured plaintiff $40,000 for medical bills, $20,000 for lost wages, $100,000 for pain and suffering, and $250,000 to punish the defendant's reckless conduct. What is the amount of special damages?

    1. A$160,000 adds pain and suffering, which is a general damage, not a special one.
    2. BCorrect: special damages are the measurable out-of-pocket losses, $40,000 medical plus $20,000 lost wages.
    3. C$100,000 is the pain and suffering award, a general damage with no receipt behind it.
    4. D$410,000 is the whole verdict, including the $250,000 punitive award that punishes rather than compensates.
  2. Item 02Homeowners insurance

    A fire destroys $900 in cash and a $2,000 bracelet in Omar's home. Under a 2011 HO-3 with no endorsements, how much will the policy pay, ignoring the deductible?

    1. A$2,900 ignores the $200 special limit on money, which applies to loss by any peril.
    2. B$1,700 wrongly applies the $1,500 jewelry limit, which is a theft-only limit, to a fire loss.
    3. C$2,000 pays the bracelet but forgets the $200 the policy still owes for the cash.
    4. DCorrect: money is capped at $200 for any peril, and the jewelry limit applies only to theft, so $200 + $2,000 = $2,200.
  3. Item 03Property insurance basics

    An open-perils homeowners policy excludes earth movement. An earthquake cracks the foundation and ruptures a gas line, causing a fire that burns the house. What is covered?

    1. ACorrect: the earth movement exclusion gives back ensuing fire, so the fire is paid while the earthquake cracks stay excluded.
    2. BDenying everything misses the ensuing-fire exception written into the earth movement exclusion.
    3. CPaying the foundation cracks ignores the earth movement exclusion, which only an earthquake endorsement removes.
    4. DThis flips the rule: the cracks are the excluded earthquake damage, and the fire is what comes back.
  4. Item 04Umbrella, flood and floaters

    The ISO mobile home endorsement is attached to which homeowners forms?

    1. AHO-5 and HO-8 are not the forms the mobile home endorsement modifies; it rides on the HO-2 or HO-3.
    2. BHO-4 and HO-6 do not insure a whole dwelling, so they cannot be converted to cover a mobile home.
    3. CDP-1 and DP-2 are dwelling forms, a separate program from homeowners.
    4. DCorrect: the mobile home endorsement modifies an HO-2 or HO-3 to insure a mobile home and its other structures.
  5. Item 05Personal auto policy

    Under the 2018 PAP, which of the following vehicles would NOT qualify as a 'newly acquired auto'?

    1. ACorrect: a pickup or van used to deliver goods fails the newly-acquired-auto test unless the use is farming or ranching or incidental to installing or repairing furnishings or equipment.
    2. BFarming and ranching use is a stated exception, so the farm pickup still qualifies.
    3. CAny private passenger auto qualifies as a newly acquired auto.
    4. DA 9,000-pound rating is under the 10,000-pound GVWR ceiling, so this pickup qualifies.
  6. Item 06Homeowners insurance

    Rita's neighbor sues her for slander over comments she made at a homeowners association meeting. Rita's HO-3 will respond only if it includes which of the following?

    1. ARaising Coverage F only adds guest medical payments; slander is not bodily injury at all.
    2. BScheduling personal property adds first-party coverage on valuables, not liability for remarks.
    3. CCorrect: Coverage E covers only bodily injury and property damage, so slander needs the personal injury endorsement.
    4. DA business pursuits endorsement covers business activities, not comments at a homeowners association meeting.
  7. Item 07Umbrella, flood and floaters

    Ana has $20,000 of jewelry scheduled on a personal articles floater. She buys a $4,000 bracelet and it is stolen 10 days later, before she reports it. How much will the floater pay?

    1. ACorrect: a floater covers newly acquired items in a class already scheduled for 30 days, up to 25% of that class's amount ($5,000), so the $4,000 bracelet is paid in full.
    2. B$5,000 is the newly acquired cap (25% of the $20,000 jewelry class), not the payment, and the floater never pays more than the item's value.
    3. C$0 assumes a new item must be scheduled before it is covered, but the floater gives 30 days of automatic coverage when the class is already on the schedule.
    4. D$1,500 is the homeowners theft sublimit for jewelry, which is exactly what scheduling jewelry on a floater avoids.
  8. Item 08Commercial crime

    After filing a sworn proof of loss under a commercial crime policy, how long must the insured wait before it may sue the insurer?

    1. ACorrect: the crime form's legal action condition bars suit until 90 days after proof of loss is filed.
    2. B30 days is too short; the crime form makes the insured wait 90 days after filing proof of loss.
    3. C60 days is a common policy deadline, but not the crime form's wait before suing.
    4. D120 days is the time allowed to file the proof of loss, not the wait before suing.
  9. Item 09Umbrella, flood and floaters

    A renter in a flood zone wants NFIP coverage for her belongings. What can she buy?

    1. ACorrect: a renter can buy NFIP contents coverage alone, since the building belongs to the owner.
    2. BPrivate flood is an option, but the NFIP itself also sells contents-only coverage to renters.
    3. C'Only owners qualify' is a myth; NFIP contents coverage is available to tenants.
    4. DBuilding coverage belongs to whoever owns the structure, not the tenant.
  10. Item 10Principles of insurance

    All of the following are methods of managing risk EXCEPT:

    1. ARetention, keeping the risk and paying losses yourself, is a recognized risk management method.
    2. BCorrect: adverse selection is the insurer's problem of worse risks seeking coverage, not a way to manage risk.
    3. CAvoidance, not engaging in the activity at all, is a recognized method.
    4. DTransfer, such as buying insurance, is a basic risk management method.

Three passes through a set

  1. Pass one: what you know cold

    Answer every item you can settle in a single read. Leave the rest without guessing yet.

  2. Pass two: strike two, then decide

    Read the options before the stem and strike any that belong to a different concept than the stem. Between the last two, find the word in the stem that splits them: EXCEPT, first named insured, occurrence, a named form edition.

  3. Pass three: commit, then read every note

    Pick the stronger of what is left, then read the note on each option, the key's included. Terms you keep missing belong in the P&C flashcards.

Look-alike terms, kept apart

Moral vs morale hazard
Moral hazard is dishonesty, such as a staged loss. Morale hazard is indifference to loss because insurance will pay. More on moral vs morale hazard.
Appraisal vs arbitration
Appraisal settles only the amount of a covered loss, through two appraisers and an umpire. Arbitration is a broader settlement clause, such as the one in Part C of the PAP.
Twisting vs churning
Twisting is talking a client into replacing another insurer's policy through misrepresentation. Churning is replacing a client's policy within the same insurer, mainly to earn a new commission.
Waiver vs estoppel
A waiver gives up a known right on purpose. Estoppel stops an insurer from asserting a right once its own conduct led the insured to rely on the opposite.
Vacant vs unoccupied
A vacant building is empty of people and contents; an unoccupied one still holds its contents while nobody is there. The dwelling forms and CP 00 10 restrict some perils after more than 60 consecutive days of vacancy.
D&O vs EPLI
D&O answers claims over directors' and officers' management decisions. Employment practices liability answers claims by employees, such as discrimination, harassment or wrongful termination.

About this practice set

Are these items taken from the real exam?

No. They are written to the public content outlines and checked against the standard ISO form wording. None is a recalled exam item.

Which form editions do the answers follow?

Homeowners items follow the 2011 ISO HO-3 (HO 00 03 05 11) and auto items the 2018 PAP (PP 00 01 09 18). Commercial items follow ISO forms such as CP 00 10 10 12, CG 00 01 04 13 and CA 00 01 11 20. Insurers and states can modify these forms, so a real policy may read differently.

When is it time for the timed version?

Once a mixed set rarely surprises you. The P&C mock exam uses its own set, hides the verdicts until you submit and scores you by line.

Does it work on a phone?

Yes, in any mobile browser. The app linked on this page is for iPhone and iPad only.

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