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  4. Property and Casualty Insurance Basics

Free Property and Casualty Insurance Basics Practice Questions

Maine Property & Casualty exam — 66 practice questions.

Subtopics: Insuring agreement, Conditions, Binder, Coinsurance, Occurrence policy, Claims-made policy, Mortgagee clause, Limit of insurance, Pro rata, Replacement cost, Vacancy, Insurable interest, Loss valuation, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, Actual cash value, Pair and set clause, Vacancy provision, Mortgagee rights, Appraisal condition, Proof of loss, Salvage and abandonment, Liberalization clause, Assignment condition, 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 part of a property policy that states the insurer's basic promise to pay for covered losses is the:

Insuring agreement

The insuring agreement sets out the insurer's core promise to pay for losses the policy covers.

2. The section of a policy that sets out the duties and rules both parties must follow, such as how to file a claim, is the:

Conditions

The conditions section spells out the rules and duties governing the policy, such as claim procedures.

3. A binder provides:

Temporary evidence of coverage until the policy is formally issued

A binder is a temporary contract that provides coverage until the formal policy is issued.

4. A property owner who carries less insurance than the coinsurance clause requires will, on a partial loss, receive:

A reduced payment under the coinsurance penalty

Insuring below the coinsurance requirement triggers a penalty that reduces the payment on a partial loss.

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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 Insurance Department and the exam administrator before relying on it.