Ohio Property & Casualty Exam Flashcards

Q: How many questions are on the Ohio Property & Casualty exam?

The combined Ohio Property & Casualty exam has 150 multiple-choice questions with a 2.5-hour time limit. The exam blends a national portion (insurance fundamentals, property forms, casualty/liability, and commercial lines) with an Ohio state portion covering ODI regulation, auto financial-responsibility law, the BWC, and prohibited practices. Candidates may also sit for Property-only or Casualty-only exams separately.

Q: What is the passing score on the Ohio P&C exam?

Ohio requires a 70% scaled score to pass insurance licensing exams, including Property & Casualty. Results are delivered immediately at the PSI test center or after online proctoring. The exam is graded on scored questions only; a number of unscored pretest questions are mixed in and do not count toward your result.

Q: What are Ohio's pre-license education and CE requirements?

Ohio requires 40 hours of ODI-approved pre-license education for Property & Casualty, split as 20 hours Property and 20 hours Casualty. After licensure, producers must complete 24 hours of continuing education every two years, including at least 3 hours of ethics. Course completion certificates are valid for 180 days, and you must apply for the license within 12 months of passing the exam.

Q: What are Ohio's minimum auto liability limits?

Ohio's compulsory auto financial-responsibility minimums are 25/50/25: $25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage per accident. Ohio is an at-fault (tort) state, so the at-fault driver's liability coverage pays third-party claims. Uninsured/underinsured motorist coverage must be offered but can be rejected in writing under Ohio Revised Code 3937.

Q: How does workers compensation work in Ohio?

Ohio is one of a few monopolistic workers compensation states. Employers buy coverage from the state-run Bureau of Workers' Compensation (BWC), not from private insurers, unless they qualify as self-insured. Because the BWC is monopolistic, the employers-liability (Part Two) coverage found in standard policies is typically obtained through a separate stop-gap endorsement on a commercial liability policy.

Question 1

Peril vs. Hazard

Accepted Answer

A peril is the actual cause of loss (fire, theft, windstorm). A hazard is a condition that increases the chance or severity of a peril. Types: physical (an oily rag), moral (faking a claim), and morale (carelessness because you're insured).

Question 2

Insurable Interest

Accepted Answer

A financial stake in property or a life such that you would suffer loss if it were damaged. In property insurance it must exist at the time of loss (not necessarily at policy inception, unlike life insurance, where it must exist at inception).

Question 3

Indemnity

Accepted Answer

The principle that restores the insured to the same financial position held before the loss, no better. It prevents profiting from insurance and underlies ACV settlement, other-insurance clauses, and subrogation.

Question 4

Law of Large Numbers

Accepted Answer

The larger the pool of similar exposure units, the more accurately the insurer can predict losses. This statistical principle lets insurers set credible premiums; it is the mathematical basis for spreading risk.

Question 5

The four elements of a valid contract

Accepted Answer

Offer and acceptance (agreement), consideration, competent parties, and legal purpose. In insurance, the application plus premium is the offer/consideration; the insurer accepts by issuing the policy.

Question 6

Aleatory contract

Accepted Answer

A contract in which the dollar amounts exchanged are unequal and depend on an uncertain event. The insured may pay small premiums and collect a large claim, or pay premiums and collect nothing. Insurance is inherently aleatory.

Question 7

Contract of adhesion

Accepted Answer

A take-it-or-leave-it contract drafted entirely by the insurer; the insured cannot negotiate terms. Because of this, ambiguities are construed against the insurer (in favor of the insured) under the doctrine of reasonable expectations.

Question 8

Representation vs. Warranty vs. Concealment

Accepted Answer

A representation is a statement believed true; a material misrepresentation can void coverage. A warranty is a guaranteed-true statement that is part of the contract. Concealment is the deliberate withholding of a material fact.

Question 9

Waiver vs. Estoppel

Accepted Answer

Waiver is the voluntary giving up of a known right (e.g., an insurer accepting a late premium). Estoppel prevents a party from later asserting a right it appeared to surrender, once the other party has relied on that conduct to their detriment.

Question 10

The six parts of a policy structure

Accepted Answer

Declarations (the who/what/how much), Insuring Agreement (the promise to pay), Definitions, Conditions (duties of the parties), Exclusions (what's not covered), and Endorsements (modifications). Memorized as the framework for reading any P&C policy.

Question 11

Actual Cash Value (ACV) vs. Replacement Cost

Accepted Answer

ACV = replacement cost minus depreciation, so the insured bears the wear-and-tear cost. Replacement cost pays to repair/replace with like kind and quality with no deduction for depreciation (usually requires repairing before full payment).

Question 12

The Coinsurance Clause

Accepted Answer

Requires the insured to carry insurance equal to a stated percentage (often 80%) of property value or pay a penalty. Penalty formula: (amount carried / amount required) x loss = recovery, capped at the limit and reduced by the deductible.

Question 13

Subrogation vs. Salvage

Accepted Answer

Subrogation is the insurer's right to recover its payout from the at-fault third party after paying the insured. Salvage is the insurer's right to take and sell the damaged property it paid a total-loss claim on. Both uphold the indemnity principle.

Question 14

Named-peril vs. Open-peril (all-risk) coverage

Accepted Answer

Named-peril policies cover only perils specifically listed, and the insured must prove the loss came from a listed peril. Open-peril covers all causes except those excluded, shifting the burden to the insurer to prove an exclusion applies.

Question 15

Pro rata vs. Contribution by equal shares

Accepted Answer

Two methods of sharing a loss among insurers covering the same risk. Pro rata splits the loss in proportion to each policy's limit. Contribution by equal shares has each insurer pay equally until its limit or the loss is exhausted.

Question 16

Vacancy vs. Unoccupancy

Accepted Answer

Vacant means no people and no contents/business activity (often suspends certain coverages after 60 days). Unoccupied means furnished but no one is currently present. The distinction affects what perils remain covered.

Question 17

Dwelling forms DP-1, DP-2, DP-3

Accepted Answer

DP-1 is basic named-peril (often ACV). DP-2 is broad named-peril with more perils and replacement cost on the dwelling. DP-3 is open-peril (special) on the dwelling and named-peril on contents. Dwelling policies have no liability built in (add by endorsement).

Question 18

Dwelling Coverages A through E

Accepted Answer

A = Dwelling, B = Other Structures, C = Personal Property, D = Fair Rental Value, E = Additional Living Expense. Unlike a homeowners form, a dwelling policy excludes theft on basic forms and has no medical payments or personal liability.

Question 19

Homeowners forms HO-2, HO-3, HO-5, HO-8

Accepted Answer

HO-2 broad named-peril on dwelling and contents; HO-3 open-peril on dwelling, named-peril on contents (the most common); HO-5 open-peril on both; HO-8 modified for older homes paying on a repair-cost (not replacement) basis.

Question 20

Homeowners HO-4 and HO-6

Accepted Answer

HO-4 is the tenants (renters) form covering personal property and liability but not the building. HO-6 is the condo unit-owner form covering personal property, liability, and improvements/betterments to the unit interior (Coverage A is small).

Question 21

Homeowners Section I vs. Section II

Accepted Answer

Section I is property: Coverage A Dwelling, B Other Structures, C Personal Property, D Loss of Use. Section II is liability: Coverage E Personal Liability and Coverage F Medical Payments to Others. The two sections have separate perils and conditions.

Question 22

Coverage F Medical Payments to Others

Accepted Answer

Pays reasonable medical expenses for bodily injury to non-residents on the insured's premises (or caused by the insured) regardless of fault, with no lawsuit required. It does NOT cover injuries to the insured or regular residents of the household.

Question 23

Special limits on personal property (HO Coverage C)

Accepted Answer

Sub-limits cap certain categories even within the open Coverage C limit, e.g., cash/coins, securities, jewelry/furs for theft, firearms, and silverware. To insure high-value items fully, schedule them on a personal property (inland marine) floater.

Question 24

PAP Part A - Liability

Accepted Answer

Pays third-party bodily injury and property damage the insured is legally liable for from an auto accident, plus legal defense (defense costs are outside the limit). Often written as a single combined single limit or as split limits (BI per person / per accident / PD).

Question 25

PAP Part B - Medical Payments

Accepted Answer

Pays reasonable medical and funeral expenses for the insured and passengers injured in a covered auto accident, regardless of fault, within a short time period after the accident. It is first-party, no-fault-style coverage limited to the named perils of auto use.

Question 26

PAP Part C - Uninsured vs. Underinsured Motorists

Accepted Answer

UM pays the insured's bodily injury when an at-fault driver has no insurance (or is a hit-and-run). UIM pays when the at-fault driver's limits are too low to cover the insured's injuries. In Ohio, insurers must offer UM/UIM, but it can be rejected in writing.

Question 27

PAP Part D - Collision vs. Other-Than-Collision

Accepted Answer

Collision pays for impact with another vehicle or object, or overturn. Other-than-collision (comprehensive) covers fire, theft, glass, falling objects, flood, hitting an animal, and vandalism. Each has its own deductible; OTC perils are broader.

Question 28

PAP newly acquired auto coverage

Accepted Answer

An additional vehicle gets automatic coverage if the insured reports it within the time the policy specifies (commonly 14 days). A replacement vehicle generally carries the same coverage as the car it replaced until reported.

Question 29

Negligence and its four elements

Accepted Answer

The failure to use reasonable care. To recover, a plaintiff must prove: a legal duty owed, a breach of that duty, that the breach was the proximate cause of harm, and actual damages. All four are required for liability.

Question 30

Occurrence vs. Claims-made coverage triggers

Accepted Answer

Occurrence policies cover injury that happens during the policy period no matter when the claim is filed. Claims-made policies cover only claims first made during the policy period (subject to a retroactive date); tail/ERP coverage extends reporting after expiration.

Question 31

Bodily Injury vs. Property Damage vs. Personal Injury

Accepted Answer

Bodily injury is physical harm to a person. Property damage is physical injury to or loss of use of tangible property. Personal injury is a defined group of offenses (libel, slander, false arrest, invasion of privacy) covered under CGL Coverage B.

Question 32

Compensatory vs. Punitive damages

Accepted Answer

Compensatory damages reimburse the injured party and split into special (measurable: medical bills, lost wages) and general (intangible: pain and suffering). Punitive damages punish gross misconduct; many policies and states limit their insurability.

Question 33

Vicarious liability

Accepted Answer

Liability imposed on one party for the negligent acts of another due to their relationship, such as an employer for an employee acting within scope (respondeat superior) or a vehicle owner for a permitted driver. It extends who can be held responsible.

Question 34

Absolute vs. Strict (vicarious) liability

Accepted Answer

Absolute liability is imposed without fault for inherently dangerous activities (blasting, keeping wild animals) or under statute (workers comp). It differs from negligence, where fault must be proven; here, liability attaches regardless of care taken.

Question 35

CGL Coverage A, B, and C

Accepted Answer

Coverage A is bodily injury and property damage liability. Coverage B is personal and advertising injury. Coverage C is medical payments (small, no-fault). Coverages A and B include legal defense; defense costs are paid in addition to the limits.

Question 36

CGL aggregate vs. per-occurrence limits

Accepted Answer

The per-occurrence limit caps any single loss. The general aggregate caps total payouts for the policy period across most coverages; a separate products-completed operations aggregate applies to product/work-related claims. Once an aggregate is exhausted, no more is paid.

Question 37

Business Auto (BAP) covered-auto symbols

Accepted Answer

Numeric symbols on the BAP declarations define which autos are covered for each coverage. Symbol 1 = any auto, 2 = all owned, 7 = specifically described, 8 = hired, 9 = non-owned. Symbol 1 gives the broadest liability protection.

Question 38

Causes-of-loss forms: Basic, Broad, Special

Accepted Answer

Commercial property uses three forms. Basic is named-peril (fire, lightning, explosion, etc.). Broad adds perils like water damage and weight of snow. Special is open-peril (all risks except exclusions) and is the broadest commercial property coverage.

Question 39

Business Income vs. Extra Expense coverage

Accepted Answer

Business income (interruption) replaces lost net profit and continuing expenses while operations are suspended by a covered loss. Extra expense pays the added costs to keep operating or speed restoration. Both require a covered direct physical loss to trigger.

Question 40

Inland marine vs. Ocean marine

Accepted Answer

Ocean marine covers vessels, cargo, and liability over water (hull, cargo, freight, protection and indemnity). Inland marine grew from it to cover property in transit over land and movable/specialized property (floaters, bailee, builders risk).

Question 41

Surety bond vs. Fidelity bond

Accepted Answer

A surety bond is a three-party guarantee that a principal will perform an obligation (e.g., a contractor finishing a job); the surety can recover from the principal. A fidelity bond protects an employer against loss from employee dishonesty (theft/embezzlement).

Question 42

Businessowners Policy (BOP)

Accepted Answer

A package policy bundling commercial property and general liability for small to mid-size businesses, often with broader coverage than buying each separately. It excludes workers comp, professional liability, and auto, which must be added or written separately.

Question 43

Workers compensation: the four benefit types

Accepted Answer

Medical (unlimited, no deductible), disability income (temporary/permanent, total/partial), death benefits to survivors, and rehabilitation. It is a no-fault, statutory system: the employee gives up the right to sue in exchange for guaranteed benefits.

Question 44

Ohio Bureau of Workers' Compensation (BWC) - monopolistic state

Accepted Answer

Ohio is a monopolistic workers comp state: employers buy coverage from the state-run BWC, not private insurers (unless self-insured and approved). Because of this, employers-liability is not in the policy and is added via a stop-gap endorsement on a CGL.

Question 45

Ohio Department of Insurance (ODI) and the Superintendent

Accepted Answer

The ODI, led by the Superintendent of Insurance, regulates the Ohio insurance market: it licenses producers and insurers, reviews rates and forms, investigates complaints, and enforces the Ohio Revised Code (Title 39, including Chapter 3905 on producer licensing).

Question 46

Ohio auto financial responsibility: 25/50/25

Accepted Answer

Ohio's compulsory minimum auto liability limits are $25,000 bodily injury per person, $50,000 per accident, and $25,000 property damage. Ohio is an at-fault (tort) state, so the negligent driver's liability coverage pays third-party claims.

Question 47

Ohio FAIR Plan

Accepted Answer

Ohio's Fair Access to Insurance Requirements plan is the property insurer of last resort for owners who cannot obtain coverage in the voluntary market (often due to location or risk). It provides basic property coverage, not a substitute for a full homeowners policy.

Question 48

Ohio Property & Liability Insurance Guaranty Association (OPLIGA)

Accepted Answer

OPLIGA pays covered claims of Ohio policyholders when a member P&C insurer becomes insolvent, funded by assessments on solvent insurers. It protects consumers but applies per-claim statutory caps and does not cover every line or every dollar.

Question 49

Ohio Unfair Claims Settlement Practices

Accepted Answer

Ohio law prohibits acts like misrepresenting policy provisions, failing to act promptly on communications, denying claims without a reasonable investigation, or not attempting good-faith prompt settlement when liability is clear. The ODI enforces these as market-conduct violations.

Question 50

Ohio licensing and continuing education

Accepted Answer

Sit for the P&C exam after 40 hours of ODI-approved pre-license education (20 Property + 20 Casualty). After licensure, complete 24 hours of CE every two years, including 3 hours of ethics. An appointment from a carrier authorizes a producer to write its business.

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