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Montana Property Practice Exam

20 exam-style questions drawn from the same bank as our full Montana Property course (Montana Insurance Producer - Property - 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. Which of the following is typically INELIGIBLE for a BOP?
A small accounting officeA 200-room hotel with a restaurant and barA small apartment building under 60,000 square feetA 6,000-square-foot retail clothing store
2. The NFIP is administered by:
The state department of insuranceThe Federal ReserveHUDFEMA
3. Earthquake coverage is added to a homeowners or dwelling policy via:
A Standard Fire Policy on the dwelling, which includes earthquake as an allied lineAn earthquake endorsement (e.g., HO-04-54) or a separate earthquake policyAutomatic coverage under the unendorsed HO-3, which names earth movement as a perilThe federal flood policy (SFIP), which covers ground shaking as earth movement
4. An insurer pays a collision claim after applying the insured's $1,000 deductible, then recovers the entire loss from the at-fault driver. Under a typical subrogation condition, the deductible is:
Retained by the insurer as its fee for pursuing the recovery against the at-fault driverReimbursed to the insured out of the recovery, usually in proportion to what the insurer collectsForfeited by the insured, because a deductible is never recoverable once it has been appliedApplied a second time against the recovery before any money is released to the insured
5. Under 33-1-201, does servicing an existing policy amount to transacting insurance?
Only if the policy is renewedOnly if premium is collectedYes, matters after effectuation countNo, only new business counts
6. What does an advisory organisation publish, as distinct from a rate?
Final filed ratesApproved policy formsProspective loss costsBinding underwriting rules
7. Which statement best describes how the HO-3 Special Form treats perils?
Open perils on the dwelling and other structures; named perils on personal propertyNamed perils on the dwelling and other structures; open perils on personal property, including mysterious disappearanceNamed perils on both the dwelling and personal property, limited to the sixteen perils listed in the HO-2 Broad FormOpen perils on both the dwelling and personal property, including the loss of currency, securities, and similar valuables
8. After a rear-end collision, the insured under a personal auto policy texts the other driver, 'That was totally my fault, send me the repair bill and I'll pay it.' The other driver later sues. What problem has the insured created for coverage?
The insured has breached the duty to submit a sworn proof of loss within 60 days, which automatically voids the liability coverage.The insured has breached the duty not to admit liability or assume obligations without the insurer's consent, a material duty on liability claims.No coverage problem arises, because admissions of fault are common after accidents and an insurer cannot treat them as relevant.The insured has converted the claim into a first-party claim, so the other driver must now be paid under the insured's collision coverage.
9. Which chapter is the Montana Insurance Information and Privacy Protection Act?
Title 33 chapter 15Title 33 chapter 18Title 33 chapter 19Title 33 chapter 16
10. Which continuing education requirement is distinctive to Montana?
A biennial reporting cycleOne hour on Montana statute changesA twenty four hour totalThree hours of ethics credit
11. Adverse selection is best described as:
An appointed agent declining an applicant for an underwriting reason, governed by fair-trade rulesAn underwriter selecting only the best risks at application, a practice called preferred-class underwritingThe tendency of higher-than-average risks to seek insurance more aggressively than lower-risk insuredsA reinsurer declining a facultative placement after a quote was bound, a ceding-company dispute
12. A producer induces a replacement by leaving material coverage out of the comparison. What is this?
DefamationRebatingExcess chargingTwisting
13. A peril is best defined as:
The financial consequence of a loss.The actual cause of loss.The uncertainty concerning the occurrence of loss.A condition that increases the chance of loss.
14. What kind of property does the Valued Policy Law reach?
Personal property and contentsAny insured property in the stateAutomobiles and mobile equipmentImprovements upon real property
15. After a covered loss, the insured must 'protect the property from further damage.' If the insured ignores this duty and the damage worsens:
The insurer may cancel the policy but must pay the full claim, including the additional damage that followed.The failure has no effect on the claim, because protecting damaged property is the adjuster's responsibility.The insurer must still pay for all of the damage, including the worsening, since the original peril was covered.The insurer can reduce or deny the claim for the portion attributable to the insured's failure to mitigate.
16. The SFIP has a standard waiting period before coverage becomes effective. The standard wait is:
60 calendar days5 calendar days24 hours30 calendar days
17. A DP-2 Broad Form differs from a DP-1 Basic Form primarily in that the DP-2:
Covers flood as an additional peril, eliminating the need for a separate NFIP policy on the same propertyAdds Section II personal liability and medical payments to others as automatically included coverages on the dwelling formProvides a broader list of named perils and settles covered dwelling losses at replacement costOffers open-peril coverage on personal property under Coverage C, while leaving the dwelling on a named-peril basis
18. Montana publishes one 100-question outline spanning property and casualty. What licence is it for?
ConsultantSurplus lines producerProducerAdjuster
19. Under the ISO Homeowners form, a dwelling left vacant for more than 60 CONSECUTIVE days before a loss has coverage EXCLUDED for which of the following perils?
All perils whatsoever, the entire policy terminates automatically the instant the dwelling becomes vacant for any extended consecutive periodFire, lightning, and explosion, the core perils every homeowners form excludes once a dwelling crosses the 60-day vacancy thresholdOnly the peril of theft, with every other vacancy-sensitive peril remaining fully covered under the standard ISO homeowners vacancy provision in forceVandalism/malicious mischief, glass breakage, water damage, theft, and a few related perils.
20. Which commercial coverage is designed to respond to an employee stealing money, securities, or property from the insured employer?
Commercial Crime, Employee Theft insuring agreementCGL Coverage A, Bodily Injury and Property Damage Liability insuring agreementCommercial Property, Building and Personal Property (BPP) Coverage FormCommercial Auto, Hired Auto Liability under the Business Auto Coverage Form

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