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Question 1

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Under the ISO Personal Auto Policy (PAP), which coverage pays for damage you cause to another person's property?

Coverage A - Liability for bodily injury

Coverage B - Medical payments

Coverage A - Liability for property damage

Coverage D - Other than collision

to track

2026 Statistics

Key Facts: API Exam

100

Free Practice Questions

OpenExamPrep API question bank

70%

Passing Score per Course

The Institutes

$415

Cost per Course Exam

The Institutes 2026 pricing

~$2,000

Total Designation Cost

All required API courses

150-200 hrs

Recommended Study Time

Across full API path

1 course

Counts Toward CPCU

Personal Insurance course

API is a 4-5 course national personal-lines designation from The Institutes. Each course exam runs about 2 hours, requires 70% to pass, and costs roughly $415, totaling around $2,000 to complete the program. The curriculum covers PAP, HO forms, dwelling fire, personal umbrella, inland marine, and personal lines underwriting/re-underwriting. Online and virtual proctored exams are available year-round.

Sample API Practice Questions

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1Under the ISO Personal Auto Policy (PAP), which coverage pays for damage you cause to another person's property?

A.Coverage A - Liability for bodily injury

B.Coverage B - Medical payments

C.Coverage A - Liability for property damage

D.Coverage D - Other than collision

Explanation: PAP Part A (Liability) is split into bodily injury liability and property damage liability. Property damage liability under Part A pays for damage the insured causes to another party's property, including their vehicle, fences, or buildings.

2Which PAP coverage part pays reasonable and necessary medical expenses for the insured and passengers regardless of fault?

A.Part A - Liability

B.Part B - Medical Payments

C.Part C - Uninsured Motorists

D.Part D - Damage to Your Auto

Explanation: PAP Part B (Medical Payments) provides no-fault coverage for medical expenses incurred by the insured, family members, and passengers in the covered auto, up to the per-person limit. It applies regardless of who caused the accident.

3Coverage C of the PAP responds when the insured is injured by which type of driver?

A.A driver with no insurance or insufficient liability limits

B.A driver who is intoxicated

C.A relative who lives in the insured's household

D.A driver who is also a named insured on the policy

Explanation: PAP Part C (Uninsured Motorists) pays for bodily injury caused by an uninsured or hit-and-run driver. Underinsured Motorists (UIM), often combined with UM, pays when the at-fault driver's liability limits are insufficient to cover the damages.

4PAP Coverage D is also commonly known as what?

A.Liability coverage

B.Medical payments coverage

C.Physical damage coverage for the insured's auto

D.Uninsured motorists coverage

Explanation: PAP Part D (Damage to Your Auto) is the physical damage section, providing collision and other than collision (comprehensive) coverage on the covered auto. It is first-party coverage subject to a deductible.

5Which of the following losses would typically be covered under PAP 'Other Than Collision' rather than 'Collision'?

A.Striking a guardrail

B.Hitting a deer that ran into the road

C.Backing into a parked car

D.Rolling over after losing control on ice

Explanation: Hitting an animal (such as a deer) is treated as Other Than Collision (OTC, formerly comprehensive) under the PAP. Collision losses involve impact with another vehicle or object including guardrails and parked cars, or upset of the auto.

6Under the PAP, who qualifies as a 'family member'?

A.Only the named insured's spouse

B.Any person residing in the named insured's household for at least 30 days

C.A person related to the named insured by blood, marriage, or adoption who is a resident of the household

D.Anyone listed as a driver on the declarations page

Explanation: The PAP defines a 'family member' as a person related to the named insured by blood, marriage, or adoption who is a resident of the same household, including a ward or foster child. Residency is required, not just relationship.

7Stacking of uninsured motorists (UM) limits refers to what practice?

A.Adding the deductible across multiple vehicles

B.Combining the UM limits of multiple vehicles or policies to provide higher recovery on one loss

C.Sharing the UM limit between two named insureds on the same vehicle

D.Reducing the policy limit by amounts paid under medical payments

Explanation: Stacking allows an insured to combine UM/UIM limits across vehicles on a single policy (intra-policy stacking) or across multiple policies (inter-policy stacking) to recover a higher amount on one accident. State law determines whether stacking is allowed or can be excluded.

8A PAP insured borrows a friend's pickup truck and is in an at-fault accident. Whose policy is primary for the property damage to a third party?

A.The PAP insured's policy is always primary

B.The truck owner's policy is primary; the PAP insured's policy is excess over that

C.Both policies share equally regardless of limits

D.Neither policy responds because the vehicle was borrowed

Explanation: Under the PAP 'Other Insurance' clause, coverage on a non-owned auto is excess over any other applicable coverage. The vehicle owner's auto policy is primary, and the borrower's PAP responds as excess. This follows the principle that insurance follows the vehicle first.

9Telematics or usage-based insurance (UBI) programs typically rate personal auto policies based on which factors?

A.Driver age and gender only

B.Mileage driven, time of day, hard braking, and acceleration patterns

C.Credit score and insurance score only

D.Vehicle make and model exclusively

Explanation: Telematics-based UBI programs use vehicle-installed devices or smartphone apps to capture driving behavior data: miles driven, time of day, hard braking events, rapid acceleration, cornering, and phone use. Pricing better reflects individual risk than traditional proxies.

10Under a PAP, which of the following autos would NOT be considered 'your covered auto'?

A.A vehicle shown on the declarations page

B.A newly acquired auto if the insurer is notified within the policy's required time

C.A trailer owned by the named insured

D.A motorcycle owned by the named insured

Explanation: The PAP defines 'your covered auto' to include scheduled vehicles, newly acquired autos (with notice requirements), trailers owned by the named insured, and temporary substitute autos. Motorcycles, mopeds, and similar vehicles with fewer than four wheels are excluded and require a separate motorcycle policy.

About the API Exam

The Associate in Personal Insurance (API) designation from The Institutes is a national personal-lines credential covering Personal Auto (PAP), Homeowners (HO-2/3/5/6/8), Dwelling Fire (DP-1/2/3), Personal Umbrella, Inland Marine, watercraft, and mobile home exposures. The program emphasizes underwriting personal lines risks, re-underwriting in-force books, and applying ethics and compliance rules. One API course counts toward the CPCU designation, making API a strong stepping stone for personal-lines underwriters and producers.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$415 per course (~$2,000 total) (The Institutes)

API Exam Content Outline

25%

Personal Auto (PAP)

ISO Personal Auto Policy: Coverage A liability, B medical payments, C UM/UIM (including stacking), D physical damage, definitions, exclusions, telematics/UBI, and surcharge schedules.

25%

Homeowners (HO-2/3/5/6/8)

ISO Homeowners forms: HO-3 vs HO-5 perils, HO-6 condo, HO-8 modified, Coverage A-F structure, replacement cost vs ACV, 80% coinsurance, ALE, special limits, and Section II liability.

10%

Dwelling Fire (DP-1/2/3)

Dwelling Fire forms for rentals/seasonal/non-qualifying dwellings: DP-1 basic perils + EC, DP-2 broad, DP-3 special, fair rental value, vacancy clauses, and personal liability supplement.

10%

Personal Umbrella & Inland Marine

Personal Umbrella structure, $300K/$500K underlying limits, self-insured retention, personal injury coverage, and Personal Articles Floaters for jewelry, fine art, firearms, and instruments.

Watercraft, Mobile Home & Other Personal Lines

HO 25 HP / 26 ft watercraft limits, Boatowners and Yacht policies, Mobile Home (ML/MH) policy structure, and other niche personal-lines exposures.

15%

Underwriting Personal Lines Risk Selection

COPE property analysis, MVR/CLUE reports, credit-based insurance scoring, FCRA adverse action, public protection class (PPC), re-underwriting, telematics, and AI-driven aerial imagery.

10%

Ethics & Compliance

Institutes Code of Professional Ethics, NAIC Unfair Trade Practices, rebating, twisting, misrepresentation, GLBA privacy, fiduciary duty, and unfair claims settlement practices.

How to Pass the API Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours
Exam fee: $415 per course (~$2,000 total)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

API Study Tips from Top Performers

1Master the Personal Auto Policy (PAP) coverage parts A-D and definitions first - they appear throughout multiple courses and on most question scenarios.

2Use side-by-side coverage charts to memorize HO-2, HO-3, HO-5, HO-6, and HO-8 differences and the standard Coverage A-F percentage relationships (10/50/30).

3Practice 80% coinsurance/replacement-cost partial-loss math problems until the formula (Carried/Required x Loss) is automatic.

4Memorize HO Section II watercraft limits (25 HP outboard, 26 ft sailboat) and the personal umbrella underlying minimums ($250K/$500K BI auto, $300K HO).

5Build a one-page ethics/compliance cheat sheet covering rebating, twisting, misrepresentation, FCRA adverse action, GLBA privacy, and the Institutes Code canons - the ethics section is high-yield.

Frequently Asked Questions

How many courses are required for the API designation?

The API (Associate in Personal Insurance) designation typically requires 4-5 courses from The Institutes covering personal auto, homeowners, dwelling fire, personal umbrella, inland marine, and personal lines underwriting and ethics. Course counts and titles are periodically refreshed by The Institutes; one API course (Personal Insurance) also counts toward the CPCU designation, making API a strong building block for personal-lines professionals.

What is the passing score for API course exams?

All Institutes API course exams require a 70% passing score. Exams run approximately 2 hours, are multiple-choice, and are administered through online proctoring or in-person testing. Students get immediate score notification and can retake within the same testing window for a discounted retake fee.

How much does the API designation cost in 2026?

Each Institutes API course exam costs approximately $415 in 2026 (roughly $2,000 total to complete all 4-5 required courses, depending on the path). Many employers offer tuition reimbursement, and The Institutes regularly publishes promotional pricing on their site.

Does API count toward CPCU?

Yes - the Personal Insurance course in the API curriculum (formerly CPCU 556) also satisfies one of the eight CPCU course requirements. API designees can transition to CPCU more quickly than candidates starting from scratch, which is one reason API is popular among CPCU candidates focused on personal lines.

Who should pursue the API designation?

API is designed for personal-lines underwriters, producers, claims professionals, and customer-service representatives who want to deepen technical expertise in personal auto, homeowners, dwelling fire, umbrella, and inland marine coverages. It is also valuable for re-underwriters reviewing in-force books and underwriting trainees building a foundation for CPCU.

How long does it take to earn the API designation?

Most candidates complete API in 6-12 months while working full time, dedicating 40-60 study hours per course (150-200 hours total). The Institutes offers self-study, virtual classroom, and employer-sponsored cohort options, and exams are available year-round through online proctoring with no fixed testing windows.