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Free Property and Casualty Insurance Basics Practice Questions

Indiana Property & Casualty exam — 66 practice questions.

Subtopics: Indemnity principle, Valued policy, Salvage, Pro rata other insurance, Conditions, Declarations, Endorsement, Liability limits, Occurrence, Claims-made vs occurrence, Bodily injury vs property damage, 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, Coinsurance calculation, Actual cash value calculation, Split limits application

Read the Property and Casualty Insurance Basics study guide

Sample questions & answers

1. The principle that an insured should not profit from a loss is known as what?

Indemnity

The principle of indemnity limits recovery to the insured's actual loss so the insured is restored, not enriched.

2. A valued policy pays what amount in the event of a total covered loss?

A stated amount agreed in advance

A valued policy pays a predetermined, agreed amount upon a total loss rather than requiring proof of actual value.

3. After paying a total loss claim, an insurer's right to take and sell the damaged property is called what?

Salvage

Salvage is the insurer's right to recover and dispose of damaged property after paying the claim, reducing net loss.

4. When two policies cover the same loss on a pro rata basis, each insurer pays what?

Its proportional share of the loss

Under a pro rata other insurance clause, each insurer pays its proportionate share of the covered loss.

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Practice: Property and Casualty Insurance Basics

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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 Insurance Department and the exam administrator before relying on it.