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Washington Property & Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Washington Property & Casualty course (Washington 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 newly licensed producer wants to start writing homeowners business for an insurer. Before he may solicit that business:
the insurer must appoint him and file with the OIChe must first complete his 3 hours of ethics CEhe must file the appointment and pay the OIC feethe OIC must schedule a market conduct examination
2. 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(motor-truck cargo) policy.Yes — but only if the cargo belongs to a third party — under the older rule that was superseded by the post-2018 model amendments
3. 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 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 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 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
4. 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
5. A Washington homeowners policy is up for renewal and the insured's insurance score has fallen sharply. Under RCW 48.18.545 the insurer may:
nonrenew if the score is part of a broader underwriting reviewnot nonrenew unless it first gives an adverse action noticenot nonrenew on credit at all, whatever else it considersnonrenew the policy on the strength of the score alone
6. On a new Washington personal auto policy, the insurer may cancel for any reason the policy permits during roughly the first:
60 days30 days90 days45 days
7. Under the CGL's 'limits of insurance' section, which limit is the MOST the insurer will pay for ALL damages because of BI and PD included in the products-completed operations hazard during the policy year?
The personal and advertising injury limit.The products-completed operations aggregate limit.The general aggregate limit.The each occurrence limit.
8. An occurrence-form CGL in force from 1/1/2023 to 1/1/2024 is asked to respond to a suit filed in 2026 alleging bodily injury from an event that occurred in June 2023. Does the policy respond?
No, because occurrence coverage terminates when the policy expires — but only after the carrier exhausts the internal grievance process the question already presumes was completedNo, because the claim was not reported during the policy period, under the alternative procedure that applies only when both parties stipulate to it in writingYes, because an occurrence-form CGL responds based on when the injury or damage occurred, regardless of when the claim is made.Yes, but only if the insured purchased an Extended Reporting Period endorsement, consistent with the NAIC model treatment of separate-account products (not the general-account product here)
9. A jury awards an injured motorist the following amounts after a covered auto accident: $70,000 in medical bills, $25,000 in lost wages, and $90,000 for pain and suffering. Which amounts are classified as SPECIAL damages?
The $70,000 medical bills and the $25,000 lost wagesAll three amounts, because the jury verdict makes them objectiveOnly the $70,000 in medical bills, because lost wages are general damagesThe $90,000 for pain and suffering only
10. A warehouse worker is seriously injured on the job and collects statutory workers' compensation benefits from his employer's WC policy. His spouse then files a separate loss-of-consortium lawsuit against the employer. Which part of the standard Workers' Compensation and Employers Liability policy responds to the spouse's suit, if any?
Part One — Workers Compensation Insurance, because the spouse's claim arises from the same injury.Part Three — Other States Insurance, because it expands coverage to third parties.Part Two — Employers Liability, because consortium claims by a spouse are one of the gaps EL is designed to cover.Neither part responds; exclusive remedy bars every claim arising out of the injury.
11. Fair Rental Value under a DP-3 compensates the named insured for what, and for how long?
Unpaid rent regardless of loss, for the balance of the current lease term and any renewal options the tenant has under the agreementLost rental income when a covered loss makes the rental premises unfit, for the time reasonably required to repairThe insured's mortgage payment of principal, interest, taxes, and insurance, for up to twelve months following the date of any covered lossA flat 30% of Coverage A paid in monthly installments, regardless of the actual rental income the property was producing prior to the loss
12. An 'assigned risk' WC pool exists because:
The federal government assigns risks to carriers based on size.Voluntary carriers decline to write certain employers deemed high-risk, but those employers still need coverage to operate legally.Employers who cannot afford WC are assigned a state subsidy.The state prohibits private WC insurance — required under the federal preemption framework that yields here to the state-law rule
13. 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 refuses to respond at all because underlying limits are not maintained — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishThe umbrella reduces its limit by the amount of the shortfall and pays the balance, under the alternative procedure that applies only when both parties stipulate to it in writingThe umbrella pays everything above the actual $100,000 PAP limit — applicable to commercial scenarios only, not the personal-lines contextThe 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.
14. An insured totals her car during a covered collision. The vehicle had a pre-loss actual cash value of $18,000, and the loan payoff is $22,000. She has Part D with no GAP endorsement. What does her PAP pay, and who owes what?
The PAP pays $18,000 (ACV) minus the deductible; the insured owes the $4,000 gap to the lender herself.The PAP pays $22,000 so the loan is fully satisfied — only when the contract was issued before the regulatory amendment described aboveThe PAP pays $18,000 to the lender and $4,000 to the insured as gap coverage — applies if the loss is partial; this question describes a constructive total lossThe PAP pays $22,000 because the lender is a loss payee, under the broader consumer-protection construction sometimes applied here
15. Washington's unfair claims settlement practices regulations are found at:
WAC 284-20WAC 284-30WAC 284-40WAC 284-10
16. 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?
Cancellation — applies if the loss is partial; this question describes a constructive total lossAbandonment, under the broader consumer-protection construction sometimes applied hereSubrogation — only when the contract was issued before the regulatory amendment described aboveLoss-payable (two-name) check / joint-payee settlement.
17. For cancellation due to nonpayment of premium on a Washington homeowners policy, the minimum notice is:
20 days5 days45 days10 days
18. A Personal Articles Floater (PAF) schedules individual valuables — how does settlement differ from a homeowners-policy sublimit?
The 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 settles every claim at actual cash value with depreciation applied from the original purchase date of the scheduled itemThe PAF is typically open-peril, worldwide, and pays the scheduled amount (or appraised value) without applying the Coverage C sublimit
19. Under a standard ISO homeowners policy, what is the default limit for Coverage B — Other Structures, expressed as a percentage of Coverage A?
50%20%5%10%
20. Inducing a policyholder to drop an existing policy and replace it through misrepresentation is:
twistingdefamationunfair discriminationrebating

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