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Iowa Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Iowa Casualty course (Iowa Insurance Producer - Casualty - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Under the ISO Personal Auto Policy (PAP), which Part covers physical damage to the insured's own vehicle from causes such as fire, theft, vandalism, and falling objects?
Part A, Liability Coverage for property damage the insured causesPart D, Coverage for Damage to Your Auto (Comprehensive / Other-than-Collision)Part B, Medical Payments Coverage for damage to the covered autoPart C, Uninsured Motorists Coverage for physical damage losses
2. The standard ISO CGL form (CG 00 01) is written on which trigger?
Pure occurrenceModified discoveryClaims-madeOccurrence with retroactive date
3. How does 515B.5 treat a covered claim for workers compensation benefits?
Capped at 300,000 dollarsCapped at 500,000 dollarsExcluded from coverageThe full amount, with no cap
4. An architect switches E&O carriers. Old carrier policy 2020-2024 had retro date 2020. New 2024-2025 policy is offered with: (a) a 2024 retro date, or (b) a 2020 retro date. In 2025, a client sues for a 2022 design error. Coverage results are:
Both (a) and (b) cover the loss, because the policy is in force when the claim is made and that trigger controlsNeither (a) nor (b), because the policy in effect at the time of the wrongful act still owes the claim(a) excluded, error predates retro; (b) covered, full prior-acts back to 2020 picks up the 2022 error(a) covered; (b) excluded, because resetting the retro date to 2024 picks up prior acts and a 2020 retro excludes them
5. On the Business Auto form, physical damage Comprehensive coverage covers:
Ordinary wear, tear, and gradual deterioration to the covered auto's mechanical and cosmetic components, which is expressly excluded under any CA 00 01 physical damage formOnly collision losses arising out of impact with another vehicle or fixed object, which is actually defined as Collision coverage and not Comprehensive on the CA 00 01Mechanical breakdown of the covered auto's internal engine and drivetrain components, which is expressly excluded under both CA 00 01 Comprehensive and CollisionLoss from causes other than collision or overturn, fire, theft, vandalism, hail, glass breakage, falling objects, animal contact, etc.
6. A crime policy's definition of 'money' typically includes:
Any property of value, including inventory, equipment, and accounts receivable records.Stocks, bonds, and other negotiable instruments held by the insured, but not currency or coins.Currency and coins only, while traveler's checks and money orders are always treated as securities.Currency, coins, bank notes, and bullion, including traveler's checks and money orders.
7. A general contractor wins a public road-construction project requiring bonds. The bond that guarantees the contractor will complete the project according to the contract is the:
Bid bond, guarantees the contractor will enter into the contract if awardedPerformance bond, protects the obligee against failure to complete the contractMaintenance bond, guarantees workmanship after completionPayment bond, protects subcontractors and suppliers from non-payment
8. The law of large numbers is the basis for which insurance practice?
Underwriting each risk individually without regard to past loss dataPaying claims in the order received until the year's premium runs outRate-setting and loss prediction based on large pools of similar risksSetting all rates by state statute regardless of the insurer's losses
9. A bookkeeper develops carpal tunnel syndrome from years of repetitive data entry. She files a workers comp claim. Which benefit type primarily addresses this loss?
Death benefits, paid to survivors regardless of the employee being alive and at workMedical benefits, covering all reasonable treatment, with no dollar cap in most statesBurial benefits, payable when an injured worker continues to incur medical treatmentSurvivors' benefits, paid to the worker's spouse when the employee remains employed
10. A claims-made CGL policy requires BOTH of the following for coverage to apply:
The claim must be first made against the insured during the policy period AND the injury must have occurred during that same policy period.The injury must occur on or after the retroactive date AND the claim must be first made against the insured during the policy period (or extended reporting period).The injury must occur during the policy period AND the insured must report the claim to the insurer within 30 days of first learning of it.The injury must occur after the retroactive date AND the insured must purchase an extended reporting period before the policy expires.
11. On the BOP property section, which statement about theft coverage is MOST accurate?
Theft is covered only when there are visible marks of forced entry, and only for property located inside a locked safe at the time of loss.Theft is covered without any sublimits, so money, securities, jewelry, and patterns are all covered up to the full business personal property limit shown on the declarations.Theft is covered, but SUBLIMITS apply to certain categories of property (money, securities, jewelry, patterns, etc.), these are common exam-tested sublimits.Theft is excluded entirely on the BOP and must be purchased separately on a commercial crime policy, along with coverage for any employee dishonesty losses.
12. A commercial tenant's desk (age 6 years, typical life 10 years) is destroyed. Replacement cost is $1,800. On an ACV basis, the claim payment is approximately:
$0, desks are not covered by casualty insurance$1,080, 6/10 of RC, reflecting depreciation of used life$1,800$720, 4/10 of RC, reflecting remaining useful life
13. An 'affirmative' warranty in casualty insurance is a statement that:
Is true at the time the contract is madeWill become true at some future point in the termHas nothing to do with the terms of the policyIs unenforceable against the named insured
14. A BOP has no coinsurance requirement on its property section. Instead, how does it address the insured's obligation to insure to value?
It requires the insured to file a statement of values every quarter, and any underreported values void the property section.It applies a mandatory 90 percent coinsurance clause to all buildings and business personal property, with a penalty on any partial loss.It insures all property at actual cash value only, so the insured's obligation to insure to value never affects the amount paid.It includes an automatic ANNUAL INFLATION GUARD and requires insurance to replacement cost to keep the coverage in force at RC.
15. A CGL claims-made policy was bound 1/1/2024 with a retroactive date of 1/1/2024. The insured negligently damages a client's data in 2023 (before retro date) but the client doesn't discover and sue until 2025. Coverage A responds how?
Full coverage, the claim was first made during the policy periodPartial coverage, the policy pays defense costs but not indemnityCoverage triggers only if an Extended Reporting Period was purchasedNo coverage, the wrongful act occurred prior to the retroactive date
16. The PAP typically excludes use of the insured vehicle:
As a public or livery conveyance (carrying persons or property for a fee), with a narrow exception for ride-sharing arrangements not covered by the policy.By any family member under age 25 who is not specifically listed as a driver on the declarations page, even when that person has the named insured's permission.For any business purpose at all, including commuting to work, since personal auto coverage applies only while the auto is used for recreation and household errands.Outside the state where the auto is principally garaged, unless the named insured notifies the insurer in writing before the trip begins and pays an additional premium.
17. Which statement about 'stated amount' (agreed value) valuation is MOST accurate for commercial auto physical damage?
The insurer and insured agree on a value at inception; if the scheduled vehicle is totaled, the insurer pays the agreed amount (subject to deductible) without depreciation dispute.The insured alone sets the vehicle's value at each renewal, and the insurer must pay that amount on any partial loss, regardless of the actual repair cost.Stated amount means the insurer pays replacement cost for a new vehicle of like kind and quality, with no deduction for depreciation and no deductible.The insurer always pays the stated amount on a total loss, even when the vehicle's actual cash value at the time of loss is much higher than the amount agreed at inception.
18. The four elements a plaintiff must prove to establish NEGLIGENCE are:
Duty, breach of duty, proximate cause, and damagesAgreement, consideration, performance, and breachIntent, motive, act, and damagesWarranty, representation, reliance, and harm
19. A personal UMBRELLA policy may DROP DOWN and pay a loss if:
The underlying policy's coverage trigger never occurred.The underlying policy has a lapse and the insured did not reinstate it.The underlying auto/homeowners liability limits are exhausted for a covered loss.The insured refused to buy underlying insurance.
20. Uninsured Motorists (UM) coverage on a PAP responds when:
The insured is at fault for an accident that injures the other driverThe insured is injured by a driver who has no liability insurance or is a hit-and-runThe insured's covered auto is damaged by hail or another weather perilThe insured is sued by a passenger in the covered auto over a bodily injury

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