Free Iowa P&C Exam Flashcards

A peril is the cause of loss (fire, theft, windstorm). A hazard is a condition that raises the chance or severity of loss. Physical hazards are tangible (worn wiring); moral hazards involve intentional dishonesty; morale hazards are carelessness because insurance exists.

A financial stake such that damage would cause the insured an economic loss. In property insurance it must exist at the time of loss. Without it, the contract is an unenforceable wager and violates indemnity.

Restores the insured to the pre-loss financial position—no profit from a claim. Tools that enforce it include ACV settlement, deductibles, other-insurance clauses, and subrogation.

As the number of similar exposure units grows, predicted losses become more stable and premiums more credible. It is the statistical foundation that lets insurers spread risk across a pool.

Agreement (offer and acceptance), consideration, competent parties, and legal purpose. The application and premium typically form the offer/consideration; the insurer accepts by issuing the policy.

Aleatory means unequal dollar exchange depending on an uncertain event (small premium vs. large claim, or premiums with no claim). Adhesion means the insurer drafts take-it-or-leave-it terms, so ambiguities are construed against the insurer.

A representation is a statement believed true; a material misrepresentation can void coverage. A warranty is a guaranteed-true contractual promise. Concealment is intentionally withholding a material fact.

Waiver is voluntarily giving up a known right (e.g., accepting a late premium). Estoppel bars later asserting that right once the other party reasonably relied on the waiver to their detriment.

Declarations (who/what/limits), Insuring Agreement (promise to pay), Conditions (duties and rules), Exclusions (what is removed). Endorsements modify any of these parts.

ACV is typically replacement cost minus depreciation, so the insured bears wear-and-tear. Replacement cost pays like-kind new property without depreciation, usually after repairs are completed and often subject to an 80% insurance-to-value rule.

If the insured carries less than the required percentage of value (often 80%), recovery = (amount carried ÷ amount required) × loss, then apply the deductible and cap at the limit. Underinsurance creates a penalty on partial losses.

Subrogation lets the insurer pursue the at-fault third party after paying the insured. Salvage lets the insurer take title to damaged property it paid as a total loss. Both support indemnity and prevent double recovery.

Named-peril covers only listed causes; the insured must prove a listed peril caused the loss. Open-peril (special/all-risk) covers all causes except exclusions, shifting the burden to the insurer to prove an exclusion applies.

Vacant usually means no people and insufficient contents/business activity, which can suspend coverages (often after 60 days). Unoccupied means furnished but temporarily empty. The distinction changes which perils remain covered.

When multiple policies cover the same loss, pro rata splits by each policy's limit share. Contribution by equal shares has each insurer pay equally until a limit is exhausted or the loss is paid.

DP-1 is basic named-peril (often ACV). DP-2 is broader named-peril with more perils and typically RC on the dwelling. DP-3 is open-peril on the dwelling and named-peril on contents. Standard dwelling forms lack built-in liability.

HO-2: broad named-peril on dwelling and contents. HO-3: open-peril dwelling, named-peril contents (most common). HO-5: open-peril on both. HO-8: modified for older homes, often repair-cost rather than full replacement.

HO-4 (renters) covers personal property and liability, not the building. HO-6 (condo unit owners) covers personal property, liability, and limited Coverage A for unit improvements/betterments.

Section I is property: A Dwelling, B Other Structures, C Personal Property, D Loss of Use. Section II is liability: E Personal Liability and F Medical Payments to Others. Each section has its own conditions and exclusions.

Pays reasonable medical expenses for bodily injury to guests or others injured by the insured's activities, regardless of fault and without a lawsuit. It does not cover the named insured or regular household residents.

In Iowa's severe-weather market, wind/hail deductibles are often a percentage of Coverage A rather than a flat dollar amount. Standard homeowners forms exclude flood; flood must be written through NFIP or private flood (NFIP typically has a 30-day wait).

Pays third-party bodily injury and property damage the insured is legally liable for from a covered auto accident, plus defense costs (usually outside the limit). Written as split limits or a combined single limit.

Pays reasonable medical and funeral expenses for the insured and passengers injured in a covered auto accident, regardless of fault, subject to the Part B limit and time window in the policy.

Uninsured motorist pays the insured's BI when the at-fault driver has no liability insurance (or is a hit-and-run). Underinsured motorist pays when the at-fault driver's limits are too low. In Iowa, UM/UIM must be offered but can be rejected in writing.

Collision covers impact with another vehicle/object or overturn. Other-than-collision (comprehensive) covers fire, theft, glass, flood, vandalism, falling objects, and animal strikes. Each has its own deductible.

Iowa financial-responsibility minimums are $20,000 BI per person, $40,000 BI per accident, and $15,000 property damage (Iowa Code chapter 321A). Iowa is an at-fault tort state with no mandatory PIP; liability protects third parties.

Duty owed, breach of that duty, proximate cause linking the breach to harm, and actual damages. All four must be proven for a negligence liability claim.

Under Iowa Code Chapter 668, a claimant who is 50% or less at fault may recover (reduced by their share). A claimant 51% or more at fault recovers nothing. Joint and several liability for economic damages generally applies only to defendants found 50% or more at fault.

Occurrence covers injury that happens during the policy period no matter when the claim is filed. Claims-made covers claims first made during the policy period (subject to a retroactive date); an extended reporting period (tail) can extend reporting after expiration.

Bodily injury is physical harm to a person. Property damage is physical injury to tangible property or loss of its use. Personal injury (CGL Coverage B) means defined offenses such as libel, slander, false arrest, and invasion of privacy—not the same as BI.

Compensatory damages restore the injured party (special/economic and general/noneconomic). Punitive damages punish egregious conduct; many policies and jurisdictions limit or exclude their insurability.

Liability imposed on one party for another's negligence because of their relationship—most often an employer for an employee acting within the scope of employment. Vehicle owners can also face liability for permitted drivers.

A: bodily injury and property damage liability (usually occurrence). B: personal and advertising injury. C: medical payments (small, no-fault). Defense for A and B is typically paid in addition to the limits.

The each-occurrence limit caps any one loss. The general aggregate caps most payouts for the policy period; a separate products-completed operations aggregate applies to product/work claims. Exhausting an aggregate ends further payments under that aggregate.

Numeric symbols on the BAP declarations define which autos are covered. Symbol 1 = any auto (broadest liability), 2 = owned autos, 7 = specifically described, 8 = hired, 9 = non-owned.

Basic: named perils (fire, lightning, explosion, etc.). Broad: adds perils such as water damage and weight of ice/snow. Special: open-peril except exclusions—the broadest commercial property form.

Business income replaces lost net profit and continuing expenses while operations are suspended by a covered direct physical loss. Extra expense pays added costs to continue operations or speed restoration. Both need a covered property trigger.

A package combining commercial property and general liability for eligible small/mid-size risks, often with broader package features than buying each line alone. It typically excludes workers comp, professional liability, and auto.

Medical care, disability income (temporary/permanent, total/partial), death benefits to dependents, and rehabilitation. It is a no-fault statutory system: employees generally trade the right to sue a complying employer for guaranteed benefits (exclusive remedy).

Iowa generally requires coverage for employers with one or more employees (Chapters 85–87). Coverage may be bought from a licensed carrier or obtained via approved self-insurance. Up to four corporate officers may reject coverage for themselves by filing the required form. Notice of injury is typically due within 90 days.

The Iowa Insurance Division (IID) regulates insurers and producers: licensing, solvency exams, form/rate oversight, and consumer protection. The Insurance Commissioner is appointed by the Governor. Key statutes include Chapters 505–515B, with producer licensing in 522B and unfair practices in 507B.

Iowa does not offer a combined P&C exam. Current Pearson VUE outlines: Property 81 scored + 10 pretest; Casualty 83 scored + 10 pretest; 2 hours each; fee commonly listed at $44 per exam. Results are pass/fail under a standard set by the IID.

No mandatory pre-license hours; age 18+. Pass Property and/or Casualty via Pearson VUE. Resident applicants need Fieldprint fingerprinting (required since June 2, 2025). Apply through NIPR within 90 days of passing. Initial license term is three years, keyed to birth month.

36 approved CE credits each CE term, including 3 ethics credits (Iowa Admin. Code 191-11.3). Excess hours do not carry over. First-time licensees are typically exempt for the first renewal period. Crop-only producers have a reduced 18-hour requirement (including ethics).

Iowa allows temporary producer licenses in limited situations (e.g., surviving spouse or business continuity) under Chapter 522B / Admin. Code 191-10.11, without the full exam path. A company appointment authorizes a producer to solicit for that insurer; appointments are tracked under 522B.13.

Iowa's residual-market property facility for owners who cannot obtain voluntary coverage (often after recent rejection, nonrenewal, or cancellation). It offers basic fire and extended perils—not a full HO-3 package and not flood. Only a licensed Iowa producer may submit applications after a genuine market search.

Pays covered claims of Iowa residents (or Iowa-sited property) when an admitted P&C member insurer becomes insolvent. Funded by assessments on member insurers. Covered claims are generally capped (commonly studied at $300,000 or the policy limit if lower). Surplus lines, life/health, title, surety, and ocean marine are outside this fund.

Prohibits misrepresentation, false advertising, defamation, boycott/coercion, unfair discrimination, rebating, and unfair claims settlement practices. Twisting (deceptive replacement to another insurer) and churning (abusive same-insurer replacement) are classic exam examples. IID may issue cease-and-desist orders, fines, restitution, or license action.

Producers hold premiums in a fiduciary/trust capacity for the insurer or insured. Commingling premium funds with personal or agency operating money, or converting premiums, is among the most serious Iowa violations and a common ground for revocation under Chapter 507B / producer rules.

A surety bond is a three-party guarantee (principal, obligee, surety) that an obligation will be performed; the surety can seek reimbursement from the principal. A fidelity bond protects an employer against employee dishonesty and behaves more like insurance (the insurer expects some loss).