Free practice exam · no signup needed

South Dakota Property & Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full South Dakota Property & Casualty course (South Dakota 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 manufacturer of defective kitchen knives is held liable for injuries regardless of whether the plaintiff can prove negligence or intent. This liability theory is called:
Comparative negligence.Contributory negligence.Strict liability.Vicarious liability.
2. The CGL's 'damage to your work' exclusion eliminates coverage for:
Damage to all contractors on the job site — applicable to surplus-lines placements, which the scenario explicitly excludesDamage caused by products of other manufacturers — required if and only if the policy includes a co-insurance penalty endorsementDamage to other people's property caused by the insured's work — required under the federal preemption framework that yields here to the state-law ruleDamage to the INSURED's own completed work product when the damage arises out of that work.
3. On an insurance application, statements made by the applicant are generally considered:
Covenants — they bind both parties equally — applies if the loss is partial; this question describes a constructive total lossWarranties — they must be literally true or the policy is void — under the older rule that was superseded by the post-2018 model amendmentsOpinions — they carry no legal weight — only when the contract was issued before the regulatory amendment described aboveRepresentations — they must be substantially true to the best of the applicant's knowledge.
4. A store clerk is held at gunpoint and forced to hand over cash from the register. Under standard crime policy definitions, this is:
Mysterious disappearance.Robbery.Theft.Burglary.
5. Commercial Auto policies classify autos by the numeric 'covered auto' symbols on the declarations. Symbol 1 means:
Any autoNon-owned autos onlyOwned autos onlyHired autos only
6. The CGL 'products-completed operations aggregate' is a separate aggregate limit that applies to:
Coverage C medical payments to others, a sublimit category that erodes the General Aggregate within per-occurrence and never touches the PCO Aggregate at allLosses caused by ordinary premises-and-operations exposures at the insured's location, which actually erode the General Aggregate rather than the PCO AggregateCoverage B personal and advertising injury offenses, which actually erode the General Aggregate and never the separate PCO Aggregate under any CGL formLosses arising from the insured's products after they leave the insured's control AND from work completed away from the insured's premises.
7. A Personal Articles Floater (PAF) schedules individual valuables — how does settlement differ from a homeowners-policy sublimit?
The PAF settles every claim at actual cash value with depreciation applied from the original purchase date of the scheduled itemThe PAF covers only the peril of theft and only while the scheduled item is physically located at the named insured's primary residenceThe PAF automatically excludes accidental damage and breakage, limiting coverage to a narrow list of named perils similar to a DP-1 formThe PAF is typically open-peril, worldwide, and pays the scheduled amount (or appraised value) without applying the Coverage C sublimit
8. A 10-year-old roof with a 20-year expected useful life is destroyed by a covered windstorm. Replacement cost for a new roof is $12,000. Using straight-line depreciation, what is the ACV settlement (before deductible)?
$6,000$9,600$12,000$3,000
9. A retail store's crime policy covers 'burglary and robbery' only. Which of the following losses is covered under that form?
The store manager notices a $2,000 watch is missing with no sign of break-in and no idea when it disappeared.An employee pockets cash from the register over several weeks.A cashier hands over the till after a masked individual points a weapon at her.A shoplifter walks out of the store during business hours with $300 of merchandise concealed under a jacket.
10. In a liability policy, when must the insured have an insurable interest?
At the time of loss onlyNever — insurable interest is a property concept onlyAt BOTH the inception of the policy and the time of lossAt the inception of the policy only
11. Insurance contracts are 'unilateral.' What does this mean?
Neither party is bound until a loss occurs — under the older rule that was superseded by the post-2018 model amendmentsOnly the insurer makes an enforceable promise; the insured can stop paying at any time without breaching.Both parties make equally enforceable promises — required if and only if the policy includes a co-insurance penalty endorsementOnly the insured makes an enforceable promise — applicable to surplus-lines placements, which the scenario explicitly excludes
12. A general contractor is named as an additional insured on a subcontractor's CGL policy for a jobsite project. Which statement BEST describes the GC's insurable interest in the sub's CGL?
The GC's insurable interest is limited to the physical property on the jobsite, not liability exposureThe GC's insurable interest arises from its legal exposure to suits stemming from the sub's operations on the projectThe AI endorsement itself creates the insurable interest where none existed beforeThe GC has no insurable interest because it does not own the sub's operations or equipment
13. Abandonment clauses generally state that:
The insured may NOT abandon damaged property to the insurer.Abandonment is permitted only after 90 days of negotiation.The insurer may abandon the loss investigation at any time.The insured may abandon damaged property to the insurer in exchange for a total-loss settlement.
14. A commercial auto applicant states on the application that 'No driver has had a DUI in the last five years.' One driver had a DUI 3 years ago. The insurer discovers this after a major loss. The insurer's likely remedy is based on:
Nothing — statements on commercial applications are never enforceable.Concealment — only applies if the insurer failed to ask the question.Warranty — any breach voids the policy automatically, per the safe-harbor exception that activates only for primary-state filingsMaterial misrepresentation — if the false statement was material to the risk, the insurer may rescind coverage back to inception.
15. Which coverage form, if any, would settle a personal-property loss on an actual-cash-value basis by default — even when the dwelling is insured for replacement cost?
All homeowners forms now settle Coverage C at replacement cost by default under the current ISO edition without any endorsement requiredHO-3 and HO-5 — Coverage C is ACV unless the insured adds a Personal Property Replacement Cost endorsementHO-4 — Coverage C is always replacement cost on the tenant form because renters have no dwelling value to bring up to coinsuranceHO-6 — Coverage C is always replacement cost on the condo form because the association policy handles the dwelling structure
16. A South Dakota driver causes an at-fault accident while uninsured. What is the most likely consequence under SDCL chapter 32-35?
Mandatory enrolment in the South Dakota Automobile Insurance Plan for three yearsSuspension of licence and registration until proof of future financial responsibility is filedA modest civil fine, with no effect at all on the driver's licence or registrationAutomatic felony prosecution for operating a motor vehicle without insurance
17. 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:
$720 — 4/10 of RC, reflecting remaining useful life$0 — desks are not covered by casualty insurance$1,080 — 6/10 of RC, reflecting depreciation of used life$1,800
18. An insured's DP-3 covers a rental property. The tenant's personal property is destroyed by a covered fire. Who, if anyone, will the DP-3 pay for the tenant's lost property?
No one — the tenant's personal property is not covered on the landlord's DP-3The mortgagee, under the loss payable clauseThe landlord — the landlord can claim the tenant's property under Coverage CThe tenant — Coverage C will pay up to the scheduled limit
19. A commercial umbrella requires MAINTENANCE of specified underlying limits (e.g., $1,000,000 CGL). If the insured lets the underlying CGL lapse mid-term, what usually happens to the umbrella's response?
The umbrella responds only in excess of what the underlying WOULD HAVE PAID had it been maintained, so the insured effectively bears the underlying's limit as a retention.The umbrella becomes primary and pays from the first dollar, consistent with the model regulation but inapplicable to this scenarioThe umbrella is automatically canceled — required under a separate compliance provision that doesn't reach this fact patternThe umbrella fills the entire gap with no additional insured obligation — applies if the loss is partial; this question describes a constructive total loss
20. A liability policyholder has a $1,000,000 CGL limit and is found liable for $400,000 in damages. Under the principle of INDEMNITY, the insured should:
Receive nothing until the judgment is appealed — applies if the loss is partial; this question describes a constructive total lossReceive compensation for $400,000 — enough to restore the insured to financial position before the loss, without profit.Receive double the damages to account for inconvenience — only when the contract was issued before the regulatory amendment described aboveReceive the full $1,000,000 limit regardless of actual damages — under the older rule that was superseded by the post-2018 model amendments

Want a different set? Refresh the page for 20 new questions — the full course has 500+, each with a complete explanation, plus full-length timed exam simulations and an AI tutor.