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  4. Property and Casualty Insurance Basics

Free Property and Casualty Insurance Basics Practice Questions

Oregon Property & Casualty exam — 66 practice questions.

Subtopics: Insurable interest, Pro rata cancellation, Hazard, Limit of insurance, Liability versus property, Negligence, Strict liability, Vicarious liability, Compensatory damages, Mortgagee clause, Appraisal clause, Loss valuation, Coinsurance, 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, 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. Insurable interest in property insurance means the insured:

Would suffer a financial loss if the property were damaged or destroyed

Insurable interest exists when the insured would suffer a genuine financial loss from damage to the property.

2. When an insurer cancels a policy midterm, the unearned premium is typically returned on a:

Pro rata basis

Insurer-initiated cancellation generally returns unearned premium pro rata, while an insured-requested cancellation may be short rate.

3. Oily rags stored near a furnace are best described as a:

Hazard that increases the chance of a fire

A hazard is a condition that increases the chance or severity of a loss, such as oily rags near a heat source; fire is the peril.

4. The limit of insurance shown on a property policy represents:

The most the insurer will pay for a covered loss

The limit of insurance is the maximum the insurer will pay for a covered loss, subject to the policy terms.

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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.