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  4. Property and Casualty Insurance Basics

Free Property and Casualty Insurance Basics Practice Questions

North Carolina Property & Casualty exam — 63 practice questions.

Subtopics: Replacement cost, Actual cash value, Coinsurance clause, Named vs open peril, Deductible purpose, Liability vs property, Endorsement, Pro rata, Insurable interest, Loss valuation, Coinsurance, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, 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. Replacement cost coverage on a dwelling pays to repair or replace damaged property:

Without deduction for depreciation, subject to policy terms

Replacement cost coverage pays the cost to repair or replace with like kind and quality without deducting depreciation, subject to limits and conditions.

2. Actual cash value is generally calculated as:

Replacement cost minus depreciation

Actual cash value typically equals the replacement cost of the property minus depreciation for age and wear at the time of loss.

3. A property coinsurance clause requires the insured to carry a stated percentage of value or face:

A penalty on a partial loss if underinsured

The coinsurance clause requires insuring to a specified percentage of value; if the insured carries less, a coinsurance penalty reduces partial-loss recovery.

4. A named perils property policy covers:

Only the perils specifically listed in the policy

A named perils policy insures against only the perils specifically listed, while an open perils (all-risk) form covers all causes of loss except those excluded.

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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.