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Oklahoma Property & Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Oklahoma Property & Casualty course (Oklahoma 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. A commercial automobile policy has been in effect for 90 business days. The insurer wishes to cancel for nonpayment of premium. Under 36 O.S. § 3639, how many days' written notice are required?
At least 30 daysAt least 10 daysAt least 20 days5 days
2. The HO-2 Broad Form covers the dwelling and personal property on what basis?
Open perils on the dwelling and named perils on personal propertyNamed perils on the dwelling and open perils on personal propertyNamed perils on bothOpen perils on both
3. A commercial building has a replacement cost of $1,000,000. The policy carries an 80% coinsurance clause. The insured carries only $600,000 in limits. A partial loss of $200,000 occurs. How much does the insurer pay (before deductible)?
$100,000, a flat 50% coinsurance penalty on the loss.$200,000, the full loss is paid; coinsurance does not reduce partial-loss recoveries.$120,000, ($600,000 / $1,000,000) × $200,000.$150,000, (Amount Carried / Amount Required) × Loss = ($600,000 / $800,000) × $200,000.
4. OID opens an examination of an insurer that focuses on its rating, underwriting, claims handling, and complaint patterns. This examination is best described as a:
Market conduct examinationDomestic solvency examinationFinancial condition examinationStatutory rate hearing
5. A general contractor's WC policy is written with a $12,000 DEPOSIT PREMIUM based on projected payroll of $600,000. Actual audited payroll is $720,000. What is MOST likely to happen?
The insurer cancels the policy for misrepresenting the projected payroll on the application.The insurer bills an ADDITIONAL premium, typically about $2,400, based on the higher audited payroll.The insurer refunds part of the deposit premium, because higher payroll earns a volume discount on WC rates.Nothing changes, because the deposit premium is the final premium for the policy term once paid.
6. An insured has a $1,000,000 CGL and a $5,000,000 umbrella with a $10,000 self-insured retention (SIR) that applies to losses not covered by the underlying. A claim NOT covered by the CGL (but covered by the umbrella's broader wording) settles for $260,000. How is the loss paid?
Insured pays $10,000 SIR; CGL pays $250,000; umbrella pays nothing.CGL pays $250,000; umbrella pays the $10,000 SIR on the insured's behalf.Umbrella pays the full $260,000; the insured pays nothing at all.Insured pays $10,000 SIR; umbrella pays $250,000; CGL pays nothing.
7. A personal umbrella policy requires underlying limits of 250/500/100 on the PAP and $300,000 on the HO. The insured carries 100/300/50 PAP and $300,000 HO. A covered auto BI loss of $600,000 occurs. How does the umbrella typically respond?
The umbrella responds over the $100,000 actually carried, paying $500,000, and the insurer then charges an additional premium at renewal to account for the lower underlying limits.The umbrella drops down to fill the gap between the $100,000 carried and the $250,000 required, so the insured owes nothing and the umbrella pays the remaining $500,000 of the loss.The umbrella treats the auto limit shortfall as the insured's responsibility, it responds only over the REQUIRED $250,000 underlying, not the actual $100,000 carried. The insured personally owes the gap.The umbrella is voided entirely because the insured failed to maintain the required underlying limits, so the insured owes the full $500,000 above the PAP limit personally.
8. The CGL 'insured contract' provision extends coverage to which liability the insured assumes?
Liability for breach of contract, including damages owed when the insured fails to complete work on time or to the specifications required by the contract.Only the insured's own tort liability for injury it causes, since liability assumed under a contract for another party is always excluded from CGL coverage.Tort liability of another party that the insured has assumed under certain categories of written contracts (leases, sidetrack agreements, indemnification of municipalities, etc.).Any contractual liability the insured assumes under any written or oral agreement, including promises to pay another party's debts or to guarantee its performance.
9. Which homeowners form is the correct fit for a condominium unit owner who needs coverage for interior improvements, personal property, and liability?
HO-4HO-8HO-3HO-6
10. A homeowners policy states: 'We will pay for direct physical loss to the dwelling.' This sentence most directly reflects which part of the policy?
The exclusions.The conditions.The declarations.The insuring agreement.
11. How does a 'stated amount' valuation differ from an 'agreed value' valuation?
Both pay the face amount at total loss without any adjustment, but stated amount requires an appraisal at inception while agreed value does not; at partial loss both pay actual cash value with depreciation deducted from the recovery.Stated amount applies only to commercial property and pays replacement cost at total loss; agreed value applies only to personal lines and pays the lesser of ACV or the agreed figure, with coinsurance waived on both forms.Agreed value pays only if the insured satisfies the coinsurance requirement at the time of loss; stated amount never requires coinsurance, and both settle partial losses at the stated or agreed figure less the policy deductible.Stated amount is the maximum the insurer will pay, but the actual recovery is the lesser of ACV, cost to repair, or the stated amount; agreed value pays the agreed figure at total loss without ACV reduction.
12. An insured's home is damaged by a negligent contractor. The insurer pays the $40,000 repair under the homeowners policy and then sues the contractor to recover what it paid. What doctrine allows this?
SubrogationEstoppelAssignmentAbandonment
13. Under CGL Coverage C (Medical Payments), payment is made:
Only after the insured has been found legally liable for the injury in a court of law.Regardless of the insured's legal liability, subject to the coverage conditions.Only when the injured person signs a release waiving any bodily injury suit against the insured.Only to the insured's own employees who are injured while working on the insured's premises.
14. A licensed Oklahoma producer dies, and the agency needs someone to service the book of business while the estate is settled. Under 36 O.S. § 1435.12, the Commissioner may issue:
A permanent license issued without any examination at allA temporary license for a period not to exceed 60 daysA temporary license for a period not to exceed 180 daysA temporary license for a period not to exceed 30 days
15. A 'USL&H' endorsement on a WC policy extends coverage to:
Only employees injured while working aboard cruise ships in territorial waters, a narrow framing that misstates the federal LHWCA scope of covered maritime employment under 33 USC §902 (3)Longshore and harbor workers covered by the federal Longshore and Harbor Workers' Compensation Act, those injured over navigable waters or adjoining areas.Employees of US embassies abroad in foreign service positions, an exposure addressed by the Defense Base Act rather than by USL&H under the federal longshore-and-harbor-workers frameworkOnly employees working exclusively outside the United States in foreign jurisdictions, which is the function of a Foreign Voluntary Compensation endorsement rather than USL&H
16. A subcontract requires the sub's CGL to add the general contractor as an additional insured for BOTH ongoing AND completed operations, with primary and non-contributory wording. Which combination of endorsements satisfies the contractual requirement?
CG 20 37 (completed operations) alone, because it covers ongoing work and is primary over any other policyCG 20 10 (ongoing operations) plus CG 20 37 (completed operations) plus CG 20 01 (primary and non-contributory)CG 20 10 (ongoing operations) alone, because it automatically extends to completed operations and primary wordingCG 20 26 (designated person) plus CG 24 04 (waiver of subrogation) plus CG 20 11 (managers or lessors)
17. An insured's HO-3 has an 'ordinance or law' exclusion. What type of loss does this exclusion apply to?
Civil authority orders to evacuate ahead of a hurricane, plus the living expenses that resultDamage from a lawful demolition ordered before any covered loss occurs, plus debris removalTheft committed by a municipal employee during a code-enforcement inspection of the homeThe added cost to rebuild to meet current building codes after a covered loss
18. A Certificate of Insurance (COI) issued to a third party (e.g., a general contractor receiving a COI from its subcontractor's insurer) does which of the following?
Obligates the insurer to notify the certificate holder of cancellation.Grants the certificate holder additional-insured status automatically.Provides evidence of coverage without altering, extending, or granting rights under the actual policy.Is considered a policy change and binds the insurer to whatever is on the certificate.
19. Which of the following is a hired auto under a Business Auto Policy?
A pickup titled in the company's name and listed on the policy scheduleA delivery van the company rents from a rental agency for a two-week projectA sedan owned by the sales manager and used to visit clientsA truck owned by the company's spouse-owned second business
20. The declarations page of a property policy contains all of the following EXCEPT:
Named insured and mailing address.List of covered perils with detailed coverage triggers.Policy period (effective and expiration dates).Premium and policy limits for each coverage.

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