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  4. Property and Casualty Insurance Basics

Free Property and Casualty Insurance Basics Practice Questions

New Jersey Property & Casualty exam — 63 practice questions.

Subtopics: Insurable interest, Actual cash value, Coinsurance, Subrogation, Named perils, Open perils, Deductible, Proximate cause, Loss valuation, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, 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, 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. For property insurance, insurable interest must exist:

At the time of the loss

In property insurance, insurable interest must exist at the time of loss to collect.

2. Actual cash value is generally calculated as:

Replacement cost minus depreciation

Actual cash value equals replacement cost less depreciation at the time of loss.

3. A property coinsurance clause penalizes an insured who:

Insures below the required percentage of value

If a property is insured below the coinsurance requirement, the insured shares in the loss as a penalty.

4. After paying a covered loss, an insurer's right to recover from the at-fault party is:

Subrogation

Subrogation lets the insurer pursue the responsible third party to recover what it paid.

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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.