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Pennsylvania Property & Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Pennsylvania Property & Casualty course (Pennsylvania Property & Casualty Producer — 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 signed insurance application typically becomes part of the policy because:
The policy's entire contract clause specifically incorporates the application by reference.The agent signs the application, which binds the insurer to its statements.The insurer files a copy with the insurance department at the time of issuance.State law requires every application to be printed on the declarations page itself.
2. A producer holds a property and casualty line of authority. What special continuing education content does Pennsylvania require?
At least four of the 24 hours must be on long term careAt least two of the 24 hours must be on flood insuranceAt least two of the 24 hours must be on annuity suitabilityAt least four of the 24 hours must be on claims adjusting
3. A delivery driver runs a red light. A witness films it and reports the driver to police, but no vehicle or pedestrian is struck and no property is damaged. A bystander sues the driver's employer for negligence. Which element of a negligence claim is MISSING?
Damages, no actual injury or loss resulted from the breachBreach, running the light was not a breach of the duty of reasonable careDuty, the driver owed no duty to other road usersCausation, the breach did not cause the specific harm alleged
4. The CGL 'products-completed operations aggregate' is a separate aggregate limit that applies to:
Medical payments made under Coverage C to persons injured on the insured's premises, regardless of whether the insured is legally liable to them.All bodily injury and property damage claims arising from the insured's premises and ongoing operations, which are then excluded from the general aggregate.Losses arising from the insured's products after they leave the insured's control AND from work completed away from the insured's premises.Personal and advertising injury claims arising from the insured's products, which are then subject to a separate per offense limit of liability.
5. A licensee ignores a Department inquiry, then fails to correct within 15 days of being notified. What penalty applies?
An administrative fine of no more than $100 per day per violationAutomatic revocation of the license without any hearingAn administrative fine of no more than $500 per day per violationA referral for criminal prosecution as a felony of the third degree
6. Who actually imposes the CIVIL money penalties available under the Unfair Insurance Practices Act?
The NAIC, through its market conduct accreditation processThe Attorney General, by consent assurance with the insurerA court, in an action filed by the Insurance CommissionerThe Commissioner, by administrative order after a hearing
7. The four elements a plaintiff must prove to establish NEGLIGENCE are:
Intent, motive, act, and damagesDuty, breach of duty, proximate cause, and damagesWarranty, representation, reliance, and harmAgreement, consideration, performance, and breach
8. A carrier declines to insure an applicant based in part on information in a consumer credit report. Under the Fair Credit Reporting Act (FCRA), the carrier must:
Refund any application fee and give the applicant a full copy of the underwriting file and the carrier's internal rating worksheet.Provide the applicant with an adverse-action notice identifying the CRA and the applicant's right to obtain a free report and dispute inaccuracies.Take no further action, because the decision to decline an applicant is a business judgment that federal law does not regulate.Submit the declination to the state insurance department for review and approval before notifying the applicant of the decision.
9. An insurer markets permanent life insurance to people aged 50 and over. What must the advertising disclose?
The commission the selling producer will earn on the saleThe name of every reinsurer participating in the programAny reduction in the face amount payable and its periodThe insurer's most recent statutory surplus and reserves
10. Commercial General Liability Coverage A responds to:
Damage to the insured's own buildings and business personal property caused by fire, windstorm, theft, or other covered perils.Personal and advertising injury offenses such as libel, slander, false arrest, and copyright infringement in the insured's advertising.Bodily injury and property damage liability arising from the insured's premises, operations, products, or completed operations.Medical expenses of persons injured on the insured's premises, paid without regard to whether the insured was legally liable.
11. Under a DP-1 Basic Form, how are losses settled by default?
Replacement cost subject to 80% coinsuranceReplacement cost with no coinsuranceActual cash valueAgreed value
12. A binder is best described as:
The permanent policy document that collects every coverage term, condition, and exclusion in one placeA filed endorsement attached to the policy that binds the insured to a specific list of warranties on the formA premium discount applied to insurance policies that cover more than one property location at onceA temporary agreement providing coverage until the formal policy is issued or declined.
13. A business is rated for auto insurance based largely on:
The business's annual gross receipts and the number of employees on its payroll.Number and classification of vehicles and drivers, territory of operation, and use.The age of the business and the claims history of its general liability policy.The owner's personal credit score and the total value of the business's real property.
14. Which of the following is typically EXCLUDED under a professional liability policy?
Clerical errors in preparing client documents.Dishonest, fraudulent, criminal, or intentionally wrongful acts.Negligent advice given to a client.Failure to perform services within industry standards.
15. The BAP's physical damage coverage is typically written with which type of deductible?
Franchise deductible that disappears at a threshold.Percentage deductible based on vehicle value.Flat dollar-amount deductible per loss (e.g., $500, $1,000).Aggregate annual deductible.
16. 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)?
$120,000, ($600,000 / $1,000,000) × $200,000.$100,000, a flat 50% coinsurance penalty on the loss.$200,000, the full loss is paid; coinsurance does not reduce partial-loss recoveries.$150,000, (Amount Carried / Amount Required) × Loss = ($600,000 / $800,000) × $200,000.
17. An annual policy with an $1,800 premium is cancelled by the INSURED at the six-month mark. The short-rate cancellation table (used when the insured initiates) returns 50% of the unearned premium minus a penalty. Approximately how much premium refund does the insured receive, compared to a pro-rata refund?
Short-rate refund is EQUAL to pro-rata; the term is just another name.Short-rate refund is HIGHER than pro-rata because the insurer absorbs setup costs.Short-rate refund is LOWER than pro-rata because of the insurer's penalty/retention.Short-rate refund is zero; insureds forfeit all unearned premium.
18. A claims-made CGL policy requires BOTH of the following for coverage to apply:
The injury must occur after the retroactive date AND the insured must purchase an extended reporting period before the policy expires.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 claim must be first made against the insured during the policy period AND the injury must have occurred during that same policy period.
19. Under the Terrorism Risk Insurance Act (TRIA) as currently reauthorized, what is a commercial P&C insurer's obligation to its commercial insureds regarding terrorism coverage?
The insurer must offer terrorism coverage only to commercial insureds located in designated high-risk cities, with the terrorism premium set by a federal rate schedule rather than the insurer.The insurer is prohibited from offering terrorism coverage on commercial policies, because the federal government pays certified terrorism losses directly to the affected policyholders.The insurer must include terrorism coverage automatically in every commercial policy at no additional premium, and the commercial insured has no right to reject or decline that coverage.The insurer must make terrorism coverage available on substantially the same terms as the underlying policy; the insured may accept or reject, and the premium for terrorism coverage must be separately and conspicuously disclosed.
20. Which of the following is an example of a PURE risk (as opposed to speculative)?
The chance a new business earns a profitThe chance of winning or losing a bet on a gameThe chance that a home will be damaged by fireThe chance of gain or loss on a stock purchase

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