Free Practice Test
Free Insurance P&C Practice Test
Take our free 10-question property & casualty insurance license exam practice test — covering policy provisions, coverage types, perils, exclusions, endorsements, and state insurance law. No signup required. See your score instantly.
10 Free Insurance P&C Practice Questions
Q1. What type of risk involves only the possibility of loss or no loss, with no chance of gain?Show answer
✓ Correct Answer: Pure risk
Pure risk involves only the chance of loss or no loss. Insurance is designed to cover pure risk rather than situations that also include a chance for profit.
Q2. Which statement best demonstrates the unilateral nature of an insurance contract?Show answer
✓ Correct Answer: The insurer must pay covered claims after the premium is paid
A unilateral contract involves a legally enforceable promise by only one party, the insurer. The insured is not obligated to suffer a loss or file a claim, but the insurer must perform if covered conditions are met.
Q3. An insured wants the broadest building coverage under commercial property forms. Which form would generally best satisfy that goal?Show answer
✓ Correct Answer: Special form
The special form is generally the broadest of the standard commercial property cause-of-loss forms for buildings. It covers direct physical loss unless excluded.
Q4. A business is sued for libel after running a false advertisement about a competitor. Which CGL coverage part is most likely involved?Show answer
✓ Correct Answer: Coverage B
Coverage B addresses personal and advertising injury offenses such as libel. The claim arises from an advertising-related offense rather than bodily injury from premises operations.
Q5. What best describes Underinsured motorist coverage?Show answer
✓ Correct Answer: coverage that may apply when the at-fault driver's liability limits are insufficient to fully pay the insured's bodily injury damages
Underinsured motorist coverage is best described as coverage that may apply when the at-fault driver's liability limits are insufficient to fully pay the insured's bodily injury damages. This definition matches how the concept is tested on standard P&C licensing exams.
Q6. What best describes HO-8?Show answer
✓ Correct Answer: the modified coverage form often used for older homes where replacement cost may greatly exceed market value
HO-8 is best described as the modified coverage form often used for older homes where replacement cost may greatly exceed market value. This definition matches how the concept is tested on standard P&C licensing exams.
Q7. What best describes Business income coverage?Show answer
✓ Correct Answer: coverage for income lost because operations are suspended after covered direct physical loss
Business income coverage is best described as coverage for income lost because operations are suspended after covered direct physical loss. This definition matches how the concept is tested on standard P&C licensing exams.
Q8. What best describes A deductible?Show answer
✓ Correct Answer: the portion of a covered loss that the insured retains before the insurer pays the remainder, subject to policy terms
A deductible is best described as the portion of a covered loss that the insured retains before the insurer pays the remainder, subject to policy terms. This definition matches how the concept is tested on standard P&C licensing exams.
Q9. An applicant has submitted false information about prior losses to obtain lower premiums. Which underwriting concern is most directly shown?Show answer
✓ Correct Answer: Moral hazard
Providing false information reflects dishonesty, which is a classic moral hazard. Underwriters treat such conduct seriously because it affects both loss potential and trustworthiness.
Q10. A claim has been reported, facts have been gathered, and the insurer now decides how much is owed under the policy. Which claim step is this?Show answer
✓ Correct Answer: Evaluation
Evaluation is the stage where the insurer applies the policy to the facts and determines the amount, if any, that should be paid. It follows notice and investigation.
What Does the Property & Casualty Insurance Exam Cover?
The Property & Casualty (P&C) insurance license exam has a national/general portion covering policy provisions, types of coverage, and insurance basics, plus a state-law portion — and you must pass both. Exams typically have around 100 to 150 multiple-choice questions with a 70% passing score, split between the general/national section and the state-specific law section that you must pass separately. Each state insurance department sets the exact count, time limit, and pre-license education requirement, often 20 to 40 hours. Exams are usually delivered by Prometric, PSI, or Pearson VUE with immediate results.
How Hard Is the Property & Casualty Insurance Exam?
The Property & Casualty insurance license exam is challenging, with first-attempt pass rates around 55 to 65 percent depending on the state. Most failures come from confusing similar coverage types and from the sheer volume of terminology — perils, endorsements, exclusions, and the specifics of homeowners, auto, commercial, and liability policies. It is not math-heavy; it is memorization- and definition-heavy, and you must pass both the general and state-law sections.
How to Study for the Property & Casualty Insurance Exam
- 1.Build coverage knowledge through practice questions — not textbook re-reading. The exam tests whether you can distinguish coverage types.
- 2.Learn to tell coverage types apart — homeowners forms HO-2 through HO-8, personal auto, commercial general liability, and workers compensation.
- 3.Master perils, exclusions, and endorsements — the terminology that trips up most candidates.
- 4.Learn the standard policy structure — declarations, insuring agreement, conditions, and exclusions — so any policy question fits the same framework.
- 5.Do not neglect the state-law section — it is smaller but separately scored. Take timed practice until you clear 80 percent.
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