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New Hampshire Property & Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full New Hampshire Property & Casualty course (New Hampshire Insurance Producer — Property and 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. On an application, the insured omits mentioning that the garage contains flammable solvents stored for a side business. The insurer does not ask the question. A later fire destroys the home. Which defense is the insurer most likely to rely on, and what must it prove?
Fraud — the insurer must prove the insured intentionally burned the home — required under a separate compliance provision that doesn't reach this fact patternMisrepresentation — the insurer must prove the insured affirmatively stated something false, consistent with the model regulation but inapplicable to this scenarioBreach of warranty — any undisclosed fact voids the policy — applicable to commercial scenarios only, not the personal-lines contextConcealment — the insurer must prove the insured intentionally withheld a material fact that it had a duty to disclose.
2. An HO-3 includes what default Coverage E (personal liability) limit before endorsement?
$100,000$500,000$300,000$50,000
3. An insured is stopped at a red light when a hit-and-run driver rear-ends her. She suffers $18,000 in medical bills and $6,000 in damage to her vehicle. Her PAP has Part A 30/60/25, Part B Medical Payments $5,000, Part C UM 30/60, and Part D collision with a $500 deductible. Which parts of her PAP respond to her medical bills?
Part A, because she was injured in a covered auto — applicable to surplus-lines placements, which the scenario explicitly excludesPart B (Medical Payments) and Part C (Uninsured Motorists) — Part B pays first-dollar regardless of fault up to its limit, and Part C responds because the at-fault driver is uninsured.Part B and Part D — Part B pays medicals and Part D pays for the vehicle damage including medical bills — under the older rule that was superseded by the post-2018 model amendmentsPart C only — UM is the exclusive coverage for injuries caused by an uninsured driver — only when the contract was issued before the regulatory amendment described above
4. A signed insurance application typically becomes part of the policy because:
State law requires it automatically for all policies — required under the federal preemption framework that yields here to the state-law ruleThe policy's entire contract clause specifically incorporates the application by reference.The insurer scans it for recordkeeping only — applicable to surplus-lines placements, which the scenario explicitly excludesThe agent hands a copy to the underwriter — required if and only if the policy includes a co-insurance penalty endorsement
5. An employee is transporting the insured's cargo when a negligent bus driver rear-ends the truck, damaging the cargo. The BAP's covered-autos symbol for physical damage is Symbol 7 (only the truck is scheduled for physical damage). Is the CARGO covered by the BAP?
Yes — cargo is covered under the BAP's physical damage grant — required if and only if the policy includes a co-insurance penalty endorsementNo — the employee must purchase cargo insurance personally — only when the contract was issued before the regulatory amendment described aboveNo — the BAP covers the AUTO, not its CARGO. Cargo needs a separate inland-marine (motor-truck cargo) policy.Yes — but only if the cargo belongs to a third party — under the older rule that was superseded by the post-2018 model amendments
6. Which commercial property causes-of-loss form provides open-peril coverage?
Special Form (CP 10 30)Basic Form (CP 10 10)Broad Form (CP 10 20)Named Perils Form (CP 10 40)
7. After a total fire loss, an insured receives a check marked 'payable to John Smith and First National Bank.' This is an example of what claims-handling concept?
Subrogation — only when the contract was issued before the regulatory amendment described aboveAbandonment, under the broader consumer-protection construction sometimes applied hereCancellation — applies if the loss is partial; this question describes a constructive total lossLoss-payable (two-name) check / joint-payee settlement.
8. A thief picks the lock on a warehouse door at night and takes inventory without any signs of forcible entry. Under typical commercial crime policy definitions, is this BURGLARY?
No — burglary requires VISIBLE signs of forcible entry or exit.Yes — burglary is defined as any theft committed at night.No — burglary requires a direct confrontation with a person.Yes — any unlawful taking from a building is burglary.
9. A personal umbrella has a $500 Self-Insured Retention (SIR). The insured is sued for libel (a personal-injury offense) — a loss NOT covered by the underlying HO. The umbrella DOES cover libel. Damages are $75,000. How does the umbrella respond?
The umbrella pays $75,000 with no retention — the SIR applies only to claims shared with the underlying.The insured must sue the libel victim to trigger coverage before the umbrella responds.The umbrella pays nothing because the underlying HO did not pay first.The umbrella requires the insured to pay the $500 SIR first; the umbrella then pays the remaining $74,500.
10. Part Two (Employers Liability) of a WC policy covers:
Fines and penalties from OSHA — applicable to commercial scenarios only, not the personal-lines contextCommon-law liability of the employer for injuries not covered by WC (e.g., third-party-over actions, consequential injuries to family members, dual-capacity claims).Punitive damages assessed against the employer — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishStatutory WC benefits payable to employees, under the broader consumer-protection construction sometimes applied here
11. A commercial property insurer denies a claim because the insured waited five months to report a break-in and never produced the requested inventory of stolen items. The peril (theft) is clearly listed as covered. Which part of the policy supplies the insurer's basis for denial?
The insuring agreementThe declarations pageThe exclusionsThe conditions
12. A plaintiff in a negligence case is awarded $50,000 for pain and suffering, $30,000 for medical bills, and $10,000 in lost wages. Which category is GENERAL damages, and which are SPECIAL damages?
Pain and suffering is GENERAL; medical bills and lost wages are SPECIAL.All are special damages.Pain and suffering is SPECIAL; medical bills and lost wages are GENERAL.All are general damages.
13. A commercial property policy has an 80% coinsurance clause. The building's replacement cost is $1,000,000. The insured carries $600,000 of coverage and suffers a $200,000 covered loss. Assuming no deductible and ACV not a factor, what will the insurer pay?
$120,000$160,000$200,000$150,000
14. A controller embezzles $180,000 from her employer between 2023 and 2024. She resigns in December 2024 and the employer's crime policy is non-renewed on December 31, 2024. The embezzlement is discovered during a routine audit on November 15, 2025. The crime policy was written on the ISO Discovery Form. Is the loss covered?
Yes — any embezzlement discovered after non-renewal is automatically covered by the last policy in force.No — the discovery form's post-expiration discovery window is only 60 days, so November 2025 is far outside it.No — the discovery form only covers losses that were both sustained and discovered during the policy period.Yes — the discovery form's post-expiration reporting window is one year, so November 2025 is timely.
15. A PERFORMANCE bond guarantees:
Completion of a contract project according to contract terms.Honest conduct of employees — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishPayment of subcontractors and suppliers — applicable to commercial scenarios only, not the personal-lines contextPayment of federal taxes — required under a separate compliance provision that doesn't reach this fact pattern
16. Commercial General Liability Coverage A responds to:
Medical payments to injured non-employees regardless of fault.Personal injury and advertising injury — required if and only if the policy includes a co-insurance penalty endorsementDamage to the insured's own property — applies if the loss is partial; this question describes a constructive total lossBodily injury and property damage liability arising from the insured's premises, operations, products, or completed operations.
17. The Gramm-Leach-Bliley Act (GLBA) primarily requires financial institutions (including insurers) to:
Maintain a minimum surplus-to-premium ratio — only when the contract was issued before the regulatory amendment described aboveConduct annual independent audits, under the broader consumer-protection construction sometimes applied here, consistent with the model regulation but inapplicable to this scenarioProvide customers with a written privacy notice disclosing what non-public personal information is collected and shared, and give them an opportunity to opt out of certain sharing.Report all claims over $50,000 to the federal government — applicable to commercial scenarios only, not the personal-lines context
18. Which coverage part of the standard CGL responds to BODILY INJURY and PROPERTY DAMAGE arising out of premises, operations, and products?
Coverage C — Medical Payments — required under the federal preemption framework that yields here to the state-law ruleCoverage B — Personal and Advertising InjurySupplementary Payments — applicable to surplus-lines placements, which the scenario explicitly excludesCoverage A — Bodily Injury and Property Damage Liability
19. An Inflation Guard endorsement does which of the following?
Requires the insured to pay a stated inflation surcharge added to the policy premium at each renewal to fund anticipated future loss costsReduces the premium each year automatically by applying a credit tied to the regional change in construction-cost and labor indicesAutomatically increases Coverage A (and related coverage limits) periodically to offset inflation in construction costsAdjusts the deductible each year up or down so that the insured's out-of-pocket exposure stays constant in real economic terms
20. A store clerk is held at gunpoint and forced to hand over cash from the register. Under standard crime policy definitions, this is:
Burglary.Robbery.Theft.Mysterious disappearance.

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