9799+ Free Property & Casualty Practice Questions

Pass your Property and Casualty Insurance (National) exam on the first try — instant access, no signup required.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately

50-60% Pass Rate

9799+ Questions

100% Free

1 / 10

Question 1

Score: 0/0

A homeowner leaves their doors unlocked because they have theft coverage on their homeowners policy. This is an example of:

Physical hazard

Moral hazard

Morale hazard

Peril

to track

2026 Statistics

Key Facts: Property & Casualty Exam

50-60%

First-Time Pass Rate

National average

43%

California Pass Rate

State data

70%

Passing Score

105/150 questions

60-80 hrs

Study Time

Recommended

$60,370

Median Agent Salary

BLS 2024

47,000

Annual Job Openings

BLS

The Property & Casualty (P&C) insurance exam has only a 50-60% first-time pass rate nationally, with California's exam at just 43%. It requires 70% to pass (105/150 questions). Property and Auto sections each account for 25% of the exam. With 400,000 insurance professionals retiring by 2026 and 47,000 annual job openings (BLS), P&C offers strong career opportunities.

Sample Property & Casualty Practice Questions

Try these sample questions to test your Property & Casualty exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 9,799+ question experience with AI tutoring.

1A homeowner leaves their doors unlocked because they have theft coverage on their homeowners policy. This is an example of:

A.Physical hazard

B.Moral hazard

C.Morale hazard

D.Peril

Explanation: This is morale hazard — carelessness or indifference because insurance exists. The homeowner isn't being intentionally dishonest (moral hazard), just careless. Physical hazard would be a tangible condition like a broken lock. A peril is the actual cause of loss (theft itself).

2An insured intentionally sets fire to their warehouse to collect insurance proceeds. This is an example of:

A.Physical hazard

B.Moral hazard

C.Morale hazard

D.Risk retention

Explanation: Moral hazard involves intentional dishonesty or fraud to collect insurance. This is insurance fraud — the insured deliberately caused the loss. Morale hazard is unintentional carelessness, not deliberate criminal behavior.

3Which risk management technique involves purchasing an insurance policy?

A.Risk avoidance

B.Risk reduction

C.Risk retention

D.Risk transfer

Explanation: Risk transfer shifts the financial impact of risk to another party — usually an insurance company. Insurance is the most common form of risk transfer. Avoidance eliminates the activity, reduction minimizes likelihood, and retention means accepting the loss yourself.

4An investor purchases stock hoping the price will increase. This is an example of:

A.Pure risk

B.Speculative risk

C.Static risk

D.Fundamental risk

Explanation: Stock investment is speculative risk because there are three possible outcomes: gain (stock goes up), loss (stock goes down), or break-even. Insurance only covers pure risks where the only possibilities are loss or no loss.

5Why is flood insurance typically NOT available from private insurers?

A.Floods are too rare to predict

B.Flood damage is too small to be worth insuring

C.Floods are catastrophic — affecting many insureds simultaneously

D.Flood is a speculative risk

Explanation: Floods are catastrophic fundamental risks — one flood can affect thousands of policyholders in the same area simultaneously. This violates the "non-catastrophic" requirement for insurable risks. That's why flood coverage comes from the federal National Flood Insurance Program (NFIP), not private insurers.

6Which of the following is a pure risk?

A.Investing in cryptocurrency

B.Starting a new restaurant

C.A house being damaged by fire

D.Betting on a football game

Explanation: A house fire is pure risk — there's either a loss (fire occurs) or no loss (no fire). The other options are speculative risks with potential for gain: crypto could increase in value, the restaurant could profit, and the bet could pay out.

7For property insurance, when must insurable interest exist?

A.Only at policy inception

B.Only at time of loss

C.At both policy inception AND time of loss

D.Insurable interest is not required for property insurance

Explanation: For property and casualty insurance, insurable interest must exist at BOTH the time the policy is issued AND at the time of loss. This is different from life insurance, which only requires insurable interest at inception. This timing requirement is frequently tested on the exam.

8Your insurer pays your $10,000 auto damage claim after another driver hit you. The insurer then sues the at-fault driver. This is an example of:

A.Indemnity

B.Contribution

C.Subrogation

D.Utmost good faith

Explanation: Subrogation is the insurer's right to "step into the shoes" of the insured after paying a claim and pursue recovery from negligent third parties. The insurer paid your claim and now takes your place in pursuing the at-fault driver.

9An applicant fails to mention a previous arson conviction on their property insurance application. This is an example of:

A.Representation

B.Warranty

C.Concealment

D.Subrogation

Explanation: Concealment is the failure to disclose material information. An arson conviction is clearly material to property insurance and would have affected the insurer's decision. This violates the principle of utmost good faith and could void the policy.

10In an insurance contract, what is the insured's consideration?

A.The promise to pay claims

B.The premium payment

C.The completed application

D.The policy declarations

Explanation: Consideration is something of value each party exchanges. The insured's consideration is the premium payment. The insurer's consideration is the promise to pay covered claims. The application is the offer, not consideration.

About the Property & Casualty Exam

The property and casualty insurance exam covers homeowners, auto, commercial property, liability insurance, and state regulations. This license is essential for agents selling auto, home, and commercial insurance.

Questions

150 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$50-150 (State Insurance Commissioner)

Property & Casualty Exam Content Outline

25%

Property Insurance

Homeowners, dwelling, commercial property, and inland marine

25%

Auto Insurance

Personal auto, commercial auto, and no-fault coverage

20%

Liability Insurance

CGL, professional liability, and umbrella policies

15%

Commercial Insurance

BOP, workers comp, and commercial packages

15%

Regulations & Claims

State laws, claims process, and producer conduct

How to Pass the Property & Casualty Exam

What You Need to Know

Passing score: 70%
Exam length: 150 questions
Time limit: 2 hours
Exam fee: $50-150

Keys to Passing

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

Property & Casualty Study Tips from Top Performers

1Learn homeowners forms thoroughly - HO-2, HO-3, HO-5 and their coverage differences

2Master auto insurance coverages - liability, collision, comprehensive, UM/UIM

3Understand the difference between occurrence and claims-made liability policies

4Know commercial policies including BOP, CGL, and workers compensation

5Study mortgage-related coverages and lender requirements

Frequently Asked Questions

What is the P&C insurance exam pass rate?

The Property & Casualty exam has a first-time pass rate of only 50-60% nationally. California's P&C exam has just a 43% pass rate, making it one of the hardest. The low pass rate reflects the complexity of coverage types, exclusions, and policy forms. Thorough preparation with 300+ practice questions is essential.

How hard is the property and casualty exam?

The P&C exam is considered one of the more difficult insurance exams with pass rates around 50-60% on the first attempt. Understanding coverage types, exclusions, and endorsements is key. Plan for 60-80 hours of study over 4-6 weeks.

What does property and casualty insurance cover?

P&C insurance protects against property damage and liability claims. Property insurance covers physical damage to homes, autos, and businesses. Casualty (liability) insurance covers legal liability for injuries or damages you cause to others.

Is P&C easier than life and health?

Most find P&C more challenging due to the variety of policy types, forms, and endorsements. Life & Health has pass rates of 65-85% compared to P&C's 50-60%. Focus extra time on homeowners forms and auto coverages.

What topics should I focus on for P&C?

Focus on homeowners policy forms (HO-2, HO-3, HO-5 account for 25% combined with property), auto insurance coverages (25%), liability concepts (20%), and commercial policies (15%). Know the difference between named perils and open perils coverage.

How long should I study for the P&C exam?

Plan for 60-80 hours of study over 4-6 weeks. Given the lower pass rates, thorough preparation is essential. Complete at least 300 practice questions and score 80%+ consistently before scheduling your exam.