OR P&C Exam Flashcards

Q: How many questions are on the Oregon P&C exam and what's the passing score?

The combined Oregon Property & Casualty exam has 150 scored multiple-choice questions with a 2 hour 40 minute time limit. You need 70% correct (105 of 150) to pass. The exam is administered by PSI on behalf of the Oregon Division of Financial Regulation (DFR).

Q: What is Oregon's PIP requirement and why is it heavily tested?

Oregon requires Personal Injury Protection (PIP) on every auto policy: a no-fault benefit that pays at least $15,000 in medical expenses regardless of who caused the accident, plus wage-loss benefits (70% of lost wages) starting after a 14-day waiting period. It is tested heavily because PIP is unusual among states and easy to confuse with liability or UM/UIM coverage.

Q: Does Oregon require employer sponsorship to sit the P&C exam?

No. Unlike some securities exams, Oregon does not require an appointing insurer or employer sponsorship to register for or take the P&C producer exam. You do need 40 hours of pre-license education (20 hours property, 20 hours casualty) and must pass a background check with fingerprinting through PSI after passing.

Q: What happens if I fail the Oregon P&C exam?

Oregon uses a flat 24-hour wait before you can retake the exam, and this does not escalate after multiple failures the way some other states' exams do. There is no published cap on total attempts, but your 40-hour pre-license certificate is only valid for 12 months, so repeated failures can force you to redo pre-license education.

Q: What are Oregon's auto insurance minimum liability limits?

Oregon requires minimum liability limits of 25/50/20: $25,000 bodily injury per person, $50,000 bodily injury per accident, and $20,000 property damage. Uninsured motorist (UM) coverage matching those limits is mandatory, and underinsured motorist (UIM) coverage must be offered but can be rejected in writing.

Q: What is the Oregon Insurance Guaranty Association (OIGA) and when does it matter?

OIGA pays covered claims for policyholders of admitted Oregon insurers that become insolvent, up to statutory limits. It only protects policies written by admitted (licensed-in-Oregon) insurers - surplus lines and other non-admitted carriers are not backed by OIGA, which is a common exam trap.

Question 1

What does the Oregon DFR regulate, and where does it sit organizationally?

Accepted Answer

The Division of Financial Regulation (DFR) is Oregon's primary insurance regulator, operating within the Department of Consumer and Business Services (DCBS). It licenses producers, enforces the ORS insurance code, and investigates market conduct and unfair trade practices.

Question 2

A producer licensed in Idaho wants to also sell in Oregon without retaking pre-license education. What license type applies?

Accepted Answer

A nonresident license, issued through reciprocity with the producer's home state. Oregon honors the home-state license and education rather than requiring duplicate Oregon-specific pre-license hours.

Question 3

How many continuing education hours must an Oregon P&C producer complete, and how often?

Accepted Answer

24 hours every 2 years (biennially), including 3 hours of ethics content, approved through DFR-recognized CE providers.

Question 4

A producer offers to return part of their commission to a client to close the sale. What unfair trade practice is this, and why is it prohibited?

Accepted Answer

Rebating. It is illegal because it distorts pricing, creates unfair competition among producers, and can pressure clients into coverage that doesn't fit their needs just to capture the rebate.

Question 5

A producer tells a client a policy covers flood damage when it does not. What violation is this, and how does it differ from false advertising?

Accepted Answer

Misrepresentation: a false statement about a specific policy's terms made to an individual client. False advertising is broader deceptive marketing communicated to the public, not tied to one transaction.

Question 6

A producer collects premium from a client but hasn't yet forwarded it to the insurer. What duty governs how that money must be handled?

Accepted Answer

Fiduciary duty. Premiums collected in a producer capacity are trust funds and must be held in a separate trust/premium account, not commingled with the producer's personal or operating funds.

Question 7

A producer wants to write flood insurance policies backed by the National Flood Insurance Program (NFIP). What federal training requirement applies first?

Accepted Answer

Completion of a 3-hour NFIP flood insurance training course, a federal requirement layered on top of state P&C licensing before a producer may sell NFIP-backed flood coverage.

Question 8

What's the difference between pure risk and speculative risk, and which one is insurable?

Accepted Answer

Pure risk offers only loss or no-loss (fire, theft, injury) and is insurable. Speculative risk offers a chance of gain or loss (gambling, investing) and is never insurable.

Question 9

An insured deliberately sets a fire to collect on a policy versus an insured who just never bothers to lock their car. Which hazard type is each?

Accepted Answer

The deliberate act is a moral hazard (dishonesty that increases the chance or size of a loss). The careless indifference is a morale hazard (no bad intent, just carelessness that increases loss potential).

Question 10

What three elements must be present for an insurance contract to form, and what does each represent?

Accepted Answer

Offer (the applicant applies for coverage), acceptance (the insurer approves the risk, often via issuing the policy), and consideration (the premium paid plus the statements in the application).

Question 11

A producer's authority to bind coverage is spelled out explicitly in their agency contract. What type of authority is this?

Accepted Answer

Express authority: powers specifically written into the agency agreement, as opposed to implied authority (reasonably necessary to carry out express duties) or apparent authority (what a reasonable third party would believe the producer has).

Question 12

What is negligence, in insurance/legal terms?

Accepted Answer

The failure to exercise the degree of care a reasonably prudent person would use in similar circumstances, resulting in a breach of duty that causes harm to another party.

Question 13

A company stores dynamite for blasting work. If it explodes and injures a neighbor, does the company need to be proven negligent to be held liable?

Accepted Answer

No. Storing explosives is an inherently dangerous activity subject to strict liability, meaning liability attaches regardless of fault or negligence just because the activity itself carries extreme risk.

Question 14

An employee causes an accident while driving a company vehicle on the job. Under what liability concept can the employer also be held responsible?

Accepted Answer

Vicarious liability: an employer (or other principal) can be held liable for the acts of an employee or agent performed within the scope of their duties, even though the employer didn't personally act negligently.

Question 15

A policy lists fire, lightning, and windstorm as the only covered causes of loss. What type of peril structure is this, and who has the burden of proof?

Accepted Answer

A named peril (listed peril) structure - only the perils specifically named are covered, and the insured must prove the loss was caused by one of those listed perils.

Question 16

A 5-year-old roof is destroyed. Under an ACV settlement versus a replacement cost settlement, how does the payout differ?

Accepted Answer

ACV pays replacement cost minus depreciation for age/wear, resulting in a lower payout. Replacement cost pays to replace the roof new, with no deduction for depreciation, resulting in a higher payout (new for old).

Question 17

A collector schedules a rare painting on a policy with a preset value both the insurer and insured agree to in advance. What loss valuation method is this?

Accepted Answer

Agreed value: the insurer and insured set a fixed dollar amount ahead of time, and that amount is paid in a total loss without a separate appraisal or depreciation debate at claim time.

Question 18

What do the four core parts of a property/casualty policy do: declarations, insuring agreement, conditions, and exclusions?

Accepted Answer

Declarations identify who/what/limits; the insuring agreement is the core coverage promise; conditions spell out the insured's and insurer's duties; exclusions state what is not covered. (Remember: policy 'DICE'.)

Question 19

A building worth $500,000 is insured for only $300,000 under an 80% coinsurance clause. What happens at claim time?

Accepted Answer

Because the insured didn't carry insurance equal to at least 80% of value ($400,000), a coinsurance penalty applies: the claim payout is reduced proportionally to the underinsurance, even on a partial loss.

Question 20

A standard, owner-occupied single-family home needs open-perils coverage on both the dwelling and contents. Which homeowners form fits?

Accepted Answer

HO-5: it provides open (special) perils coverage for both the dwelling and personal property, broader than HO-3, which is open perils on the dwelling but named perils on contents.

Question 21

A renter needs coverage for their personal belongings, and a condo unit owner needs coverage for their unit's interior finishes. Which HO forms apply to each?

Accepted Answer

HO-4 (tenants/renters broad form) covers a renter's personal property and liability. HO-6 (condominium unit owners form) covers the interior 'walls-in' finishes and personal property of a condo owner, since the master policy covers the building structure.

Question 22

An owner of a rental dwelling wants broader, open-perils coverage rather than a bare-bones named-perils form. Which Dwelling Program (DP) forms represent that choice?

Accepted Answer

DP Basic covers only a short list of named perils. DP Special (DP-3) provides open-perils coverage for the dwelling, the broadest DP option, similar in structure to HO-3's dwelling coverage.

Question 23

A fire makes a rental property temporarily uninhabitable and the owner loses rental income. Which homeowners/dwelling coverage responds?

Accepted Answer

Coverage D (Loss of Use / Fair Rental Value). It reimburses lost rental income (or additional living expenses for an owner-occupant) while the property is being repaired after a covered loss.

Question 24

Standard Oregon homeowners policies exclude earthquake damage by default. What must an insurer do regarding this coverage?

Accepted Answer

The insurer must offer earthquake coverage as an endorsement and disclose that it is excluded from the base policy - the insured can decline it, but Oregon requires the offer given the state's Cascadia Subduction Zone risk.

Question 25

An insured runs a small consulting business from home and wants liability protection for that work activity added to their homeowners policy. What endorsement covers this?

Accepted Answer

The business pursuits endorsement extends personal liability coverage to specified work-related activities that would otherwise be excluded under a standard homeowners policy.

Question 26

An Oregon homeowner babysits children in their home for pay. What Oregon-specific homeowners endorsement addresses the liability exposure?

Accepted Answer

The home day care endorsement, an Oregon-specific liability endorsement that extends coverage for bodily injury claims arising from a licensed or exempt in-home day care operation.

Question 27

After a covered loss, local building codes require an insured's older home to be rebuilt to current code, adding significant cost. What endorsement pays for that code-driven upgrade?

Accepted Answer

Ordinance or law coverage. It pays the added cost of complying with current building codes during repair or rebuilding, which a standard policy would otherwise leave uncovered.

Question 28

What are Oregon's minimum auto liability limits, expressed as 25/50/20?

Accepted Answer

$25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, and $20,000 property damage liability - the statutory floor for auto liability coverage sold in Oregon.

Question 29

An insured is injured in an at-fault accident. What does Oregon's mandatory PIP coverage pay, and when do wage benefits kick in?

Accepted Answer

PIP pays medical expenses (minimum $15,000) on a no-fault basis regardless of who caused the accident, plus wage-loss benefits equal to 70% of lost income starting after a 14-day waiting period.

Question 30

An at-fault driver has no insurance at all versus an at-fault driver whose liability limits are too low to cover the loss. Which Oregon coverages respond, and how do their offer rules differ?

Accepted Answer

UM (uninsured motorist) responds when the at-fault driver has no coverage, and Oregon makes it mandatory. UIM (underinsured motorist) responds when the at-fault driver's limits are insufficient; insurers must offer it, but the insured may reject it in writing.

Question 31

An insured's car is damaged when they hit a guardrail versus when it's stolen from a parking lot and vandalized. Which physical damage coverages respond, and must a repair shop disclose anything about parts used?

Accepted Answer

Collision covers impact/upset damage (hitting the guardrail); comprehensive covers other-than-collision perils like theft and vandalism. Oregon also requires disclosure when non-OEM aftermarket crash parts are used in a repair.

Question 32

A business rents a moving truck for the weekend versus an employee who uses their personal car to run a work errand. Which commercial auto coverage extensions apply to each?

Accepted Answer

Hired autos cover vehicles the business rents or leases for its operations. Non-owned autos cover vehicles the business doesn't own or lease but that are used on its behalf, such as an employee's personal car used for work.

Question 33

A business leases company vehicles from a leasing company and wants that company protected under the auto policy. What endorsement accomplishes this?

Accepted Answer

The lessor endorsement (additional insured - lessor), which adds the leasing company as an insured on the commercial auto policy for its interest in the leased vehicles.

Question 34

A commercial auto policy needs to extend liability protection to employees while they drive covered autos on company business. What provision does this?

Accepted Answer

The 'employees as insureds' provision, which extends the commercial auto policy's coverage to employees operating a covered auto in the course of employment.

Question 35

A customer slips and falls in a store, and separately the same store damages a supplier's delivery truck while unloading. Which CGL coverage part responds to each?

Accepted Answer

Both fall under CGL Coverage A (Bodily Injury and Property Damage Liability), which covers third-party bodily injury and property damage arising from the insured's operations.

Question 36

A business is sued for running a competitor's ad slogan without permission. Which CGL coverage part responds?

Accepted Answer

CGL Coverage B (Personal and Advertising Injury), which covers offenses like copyright/slogan infringement in advertising, libel, slander, and false arrest - distinct from bodily injury or property damage.

Question 37

A customer is injured on a business's premises. The business wants to pay their minor medical bills immediately without a liability finding. What CGL provision allows this?

Accepted Answer

CGL Coverage C (Medical Payments), a no-fault, limited coverage that pays medical expenses for injured third parties regardless of the insured's legal liability, helping avoid litigation over small claims.

Question 38

A CGL policy responds based on when the injury actually happened, no matter when the claim is reported. What trigger is this, and how does the alternative trigger differ?

Accepted Answer

This is an occurrence trigger. The alternative, claims-made, triggers coverage based on when the claim is reported to the insurer, not when the injury happened - and requires tracking a retroactive date.

Question 39

Under a claims-made CGL policy, what does the retroactive date control?

Accepted Answer

The retroactive date is the earliest date an incident can have occurred and still be covered under a claims-made policy; injuries that occurred before that date are not covered even if the claim is reported during the policy period.

Question 40

A CGL policy caps how much it will pay for any single covered event, and separately caps total payouts across all events during the policy period. What are these two limits called?

Accepted Answer

The per-occurrence limit caps payout for any one event; the aggregate limit caps the total the insurer will pay for all covered events combined during the policy period.

Question 41

A mid-size manufacturer needs custom combinations of property, liability, and other coverage parts assembled into one policy. What type of policy structure fits?

Accepted Answer

A Commercial Package Policy (CPP): a modular policy that combines multiple coverage parts (property, general liability, crime, etc.) chosen to fit a specific business's risk profile.

Question 42

What does Building and Personal Property (BPP) coverage insure under a commercial property policy?

Accepted Answer

BPP covers the insured's building structure (if owned) and the business personal property inside it, such as furniture, fixtures, stock, and equipment used in the business.

Question 43

After a covered fire shuts down a business for two months, the business loses sales income but still has to pay some bills to reopen faster. Which two commercial property coverages address these two problems?

Accepted Answer

Business income coverage replaces lost earnings and continuing expenses during the shutdown period; extra expense coverage pays additional costs incurred to keep operating or reopen sooner and minimize the business income loss.

Question 44

A commercial property policy covers only losses from perils specifically listed, such as fire, lightning, and explosion. What cause-of-loss form is this?

Accepted Answer

The Basic Cause of Loss form: a named-perils form listing a limited set of covered causes of loss, narrower than the Broad or Special cause-of-loss forms.

Question 45

A small Main Street retail shop wants property and liability coverage bundled into one simple, affordable policy, rather than building a custom CPP. What product fits, and why?

Accepted Answer

A Businessowners Policy (BOP): a pre-packaged bundle of property and liability coverage designed for small, lower-risk businesses. It's simpler and often cheaper than assembling a full CPP, which suits larger or more complex commercial risks.

Question 46

Under Oregon workers compensation law, an injured employee generally cannot sue their employer in court for a workplace injury. What doctrine creates this trade-off?

Accepted Answer

The exclusive remedy doctrine: employees give up the right to sue their employer for workplace injuries in exchange for guaranteed, no-fault workers comp benefits under ORS 656.

Question 47

Oregon employers can buy workers comp coverage from a state-chartered insurer that competes directly with private carriers. What is this insurer, and what's the three-way system it's part of?

Accepted Answer

SAIF Corporation is Oregon's state-chartered but competitive workers comp insurer. Oregon's three-way system lets employers choose SAIF, a private insurer, or self-insurance to meet their workers comp obligation.

Question 48

A property owner is turned down for fire coverage by every standard-market insurer versus a business whose liability risk can't find any admitted carrier. Which Oregon residual market mechanism serves each?

Accepted Answer

The FAIR Plan is the residual market of last resort for property coverage. The JUA (Joint Underwriting Association) is the residual market mechanism for hard-to-place commercial liability risks.

Question 49

An Oregon-admitted insurer becomes insolvent while policyholders still have open claims. What entity steps in to pay those covered claims, and who is NOT protected?

Accepted Answer

The Oregon Insurance Guaranty Association (OIGA) pays covered claims up to statutory limits when an admitted insurer becomes insolvent. Policyholders of surplus lines or other non-admitted insurers are not protected by OIGA.

Question 50

A producer needs to provide a client with immediate proof of coverage before the full policy is issued. What document can they use, and how long is it valid?

Accepted Answer

A binder: a temporary written or oral contract providing immediate coverage evidence while the formal policy is being processed. In Oregon, a binder is valid for up to 90 days.

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