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187+ Free Property & Casualty Practice Questions

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2026 Statistics

Key Facts: Property & Casualty Exam

70%

Passing Score (most states)

State DOI / vendor candidate handbooks

60%

California Passing Score

PSI / California Dept. of Insurance

100-175

Questions (national + state)

Varies by state; includes unscored pretest

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 producer exam is a state-administered licensing test of about 100-175 multiple-choice questions, split into a national section and a state-law section and delivered by Pearson VUE, PSI, or Prometric. The passing score is 70% in most states (California is 60%), and in most states each section is scored separately, so you must pass both. With about 47,000 annual job openings and a $60,370 median agent salary (BLS 2024), 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 187+ 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

2-3 hours (varies by state)

Passing Score

70% (California 60%)

Exam Fee

$40-150 (varies by state) (State Department of Insurance, delivered by Pearson VUE, PSI, or Prometric)

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% (California 60%)
  • Exam length: 150 questions
  • Time limit: 2-3 hours (varies by state)
  • Exam fee: $40-150 (varies by state)

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 score do I need to pass the P&C insurance exam?

Most states require 70% to pass the Property & Casualty exam; California is the notable outlier at 60%. In many states (including Texas and Florida) the national and state-law sections are scored separately, so you must pass each independently. The exam's complexity comes from coverage types, exclusions, and policy forms, so thorough practice is essential.

How hard is the property and casualty exam?

The P&C exam is considered one of the more demanding insurance exams because of the variety of policy forms, coverages, exclusions, and endorsements you must master. Plan for 60-80 hours of study over 4-6 weeks, and pay special attention to your state-law section, which is often separately gated.

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?

Many candidates find P&C more challenging due to the variety of policy types, forms, exclusions, and endorsements, plus heavy testing of third-party liability that has no real analog on the Life exam. 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.