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Tennessee Property Practice Exam

20 exam-style questions drawn from the same bank as our full Tennessee Property course (Tennessee 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. A commercial general liability policy carries a $1,000,000 per-occurrence limit and a $2,000,000 general aggregate limit. During the policy period, three unrelated covered occurrences produce judgments of $800,000, $900,000, and $600,000 in that order. How much of the third occurrence does the insurer pay?
$1,000,000 — the per-occurrence limit reinstates for each new occurrence.$300,000 — only the remaining general aggregate is available.$600,000 — the loss is within the per-occurrence limit.$0 — the aggregate was fully consumed by the first two losses.
2. A Tennessee personal risk filing is complete and the commissioner neither disapproves it nor extends the waiting period. What is the result?
The filing lapses and must be resubmitted before it is usedThe filing is deemed to meet the requirements and becomes effectiveThe filing takes effect only after a public rate hearing is heldThe filing takes effect only on the commissioner's written order
3. 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.
4. 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 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.The insurer must offer terrorism coverage only to insureds located in designated high-risk cities, under the alternative procedure that applies only when both parties stipulate to it in writingThe insurer must include terrorism coverage automatically in every commercial policy at no additional premium — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishThe insurer is prohibited from offering terrorism coverage on commercial policies because the federal government provides it directly to insureds, per the safe-harbor exception that activates only for primary-state filings
5. A Tennessee producer places a commercial policy with a company that holds no Tennessee certificate of authority. Under Tenn. Code Ann. 56-6-114, what is the producer's exposure?
Personal liability for premiums paid and for valid claims madeSuspension of the licence for a period fixed by the commissionerNothing, provided the producer disclosed the company's statusA fine payable to the commissioner, capped at the commission earned
6. A Tennessee insurer overstates its surplus in a report it files with the Commissioner. Which enumerated UTPA practice does that describe?
Defamation of another insurer's financial conditionUnfair claims settlement practices under §56-8-105False financial statements filed with a regulatorFailure to maintain marketing and producer records
7. An insured owns a 1910 Victorian whose replacement cost is $1.2M and market value is $380,000. If the home is written on an HO-8 and suffers a total loss, how will the dwelling claim be settled?
Market value at the time of loss, with no adjustment for the spread between replacement cost and the home's depressed real-estate valueFull replacement cost using like kind and quality materials matching the original Victorian construction, provided the insured carried at least 80% to valueThe cost to repair with common construction materials and methods functionally equivalent to the original, up to the policy limitActual cash value only on both partial and total losses, with depreciation calculated using the home's 1910 original construction date
8. On a homeowners application, an applicant states that there are no trampolines on the property. At the time, the statement is believed to be true, but the applicant's teenager installs one a week later without telling anyone. Which best describes the applicant's original statement, and what must the insurer prove to deny a claim for a later trampoline-related injury?
A warranty — any breach, material or not, voids coverage.Concealment — the insurer must prove the applicant knowingly withheld a material fact.A representation — the insurer must prove the misrepresentation was material to the risk.An affirmative promise — the applicant is obligated to keep the statement true for the entire policy term.
9. Under the TDCI fair claims rules implementing Tenn. Code Ann. §56-8-105, within how long must an insurer begin its investigation after receiving notification of a claim?
30 working days5 working days15 working days10 working days
10. A Tennessee insurer receives a completed proof of loss but needs more time to decide coverage. Under Tenn. Code Ann. §56-8-105 and TDCI rules, what must it do?
Take as long as needed, since no deadline runs from the proof of lossAffirm or deny within 30 days, with no notice option open to the insurerAffirm or deny within 90 days, with no obligation to explain the delayAffirm or deny within 30 days, or notify the insured of the time needed
11. A homeowner leaves an unfenced swimming pool unsecured. A 6-year-old neighbor child wanders onto the property, falls into the pool, and is injured. The doctrine that holds the homeowner liable despite the child being a trespasser is called:
Attractive nuisance.Vicarious liability.Res ipsa loquitur.Strict liability.
12. Under the NFIP Dwelling Form, the maximum building coverage available for a single-family residence is:
$250,000$500,000$100,000Unlimited
13. Under the NFIP, the term 'flood' includes:
A general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters, or mudflowSprinkler system discharge or accidental leakage from a fire-suppression system installed inside the dwelling, including resulting water damage to building and contentsA pipe break inside the dwelling that releases water into the building from the home's interior plumbing system, regardless of whether external flooding contributed to the failureBackup through a sewer or drain that is not caused by flooding, including ordinary clogs in the municipal system or a failed sump pump during routine heavy rainfall
14. The Nationwide Marine Definition divides inland marine into how many broad classes?
SixEightFourTwo
15. A Tennessee insurer is preparing filings for a homeowners program and for a commercial package program. Which statement matches the lesson?
Homeowners is largely prior approval, and commercial is often file and useBoth programs are exempt from filing because neither is personal autoHomeowners is file and use, and commercial is largely prior approvalBoth programs use the NCCI loss cost system with a company multiplier
16. A Tennessee insurer agrees that $30,000 of a $45,000 fire claim is undisputed while it reviews the remainder. What does the claims-handling lesson require?
Pay half of the undisputed amount and hold the rest in reserveHold all payment until the entire disputed amount is resolvedPay the undisputed amount promptly once liability is establishedPay nothing until the insured signs a full and final release
17. 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.Premium and policy limits for each coverage.Policy period (effective and expiration dates).
18. An investigation determines the named insured deliberately set fire to her dwelling. A $210,000 mortgage balance is outstanding and the policy contains a standard (union) mortgage clause. The dwelling coverage limit is $250,000. How should the insurer handle the claim?
Pay the mortgagee up to the loan balance of $210,000 and deny the insured; the insurer may then pursue subrogation against the insured.Pay the full $250,000 dwelling limit to the mortgagee and refund the insured's premium — required if and only if the policy includes a co-insurance penalty endorsementDeny the entire claim; the intentional act voids coverage for all parties — applicable to surplus-lines placements, which the scenario explicitly excludesPay the insured the full $250,000 and let the mortgagee recover from the insured's share — under the older rule that was superseded by the post-2018 model amendments
19. An insurer that knowingly accepts premium after learning of a material misrepresentation may be deemed to have:
Failed to renew the policy at the end of the current annual term, an act unrelated to mid-term acceptance of premiumWaived its right to rescind, under the doctrine of waiver/estoppelVoided the policy automatically the moment the carrier learns of the misrepresentation, with no further notice requiredCommitted insurance fraud against the consumer by accepting any further premium payment after discovery
20. A Tennessee producer tells an applicant he can take 15 percent off the filed premium as a special discount he arranged himself. What does the rating lesson say about that?
Off manual rates are prohibited and risk misrepresentation exposureIt is permitted so long as the discount is disclosed on the binderIt is permitted if the producer funds the discount from commissionIt is permitted for new business but never on a renewal policy

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