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Free Property and Casualty Insurance Basics Practice Questions

Indiana Property & Casualty exam — 52 practice questions.

Subtopics: Insurable interest, Loss valuation, Coinsurance, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, Actual cash value, Replacement cost, Pair and set clause, Vacancy provision, Mortgagee rights, Appraisal condition, Proof of loss, Salvage and abandonment, Liberalization clause, Assignment condition, Binder, Sublimit, Named perils vs open perils, Burden of proof, Direct vs indirect loss, Comparative negligence, Strict liability, Vicarious liability, Punitive damages, Special vs general damages, Proximate cause, Absolute liability, Hold harmless, Bailee liability, Attractive nuisance, Res ipsa loquitur

Read the Property and Casualty Insurance Basics study guide

Sample questions & answers

1. For property insurance, when must the insured have an insurable interest?

At the time of the loss

In property insurance, insurable interest must exist at the time of loss; in life insurance it must exist at policy inception.

2. Actual cash value (ACV) is generally calculated as:

Replacement cost minus depreciation

ACV equals the cost to replace the property minus depreciation for age and wear.

3. A building with a replacement cost of $500,000 carries an 80% coinsurance clause. The owner insures it for $300,000 and has a $100,000 loss. Ignoring any deductible, how much does the insurer pay?

$75,000

Required amount = 80% x 500,000 = 400,000. Recovery = (300,000 / 400,000) x 100,000 = 75,000.

4. Which of the following is NOT one of the four elements required to prove negligence?

Intent to cause harm

Negligence requires duty, breach, proximate cause, and damages; intent is not required (and would indicate an intentional tort).

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Practice: Property and Casualty Insurance Basics

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Pennsylvania Insurance Department and the exam administrator before relying on it.