100+ Free Property-Only Practice Questions

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Question 1

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Which element is NOT one of the four requirements of an insurable risk?

The loss must be definite and measurable

The loss must be due to chance

The loss must produce a financial gain

The loss must not be catastrophic to the insurer

to track

2026 Statistics

Key Facts: Property-Only Exam

100

Practice Questions

OpenExamPrep bank

70%

Passing Score

Most state DOIs

2 hours

Time Limit

Pearson VUE Property

$50-$75

Typical Exam Fee

State DOIs

85-125

Questions on the Real Exam

Varies by state

20-30 hrs

Recommended Study Time

Industry guidance

The Property-Only license is the property half of P&C, used in states like AR, LA, MI, and MS that license property and casualty separately. Expect ~85-125 questions in 2 hours, 70% to pass, and a $50-$75 exam fee. Heaviest sections: Homeowners property (20%), Commercial Property/BOP (20%), Dwelling Fire (15%). Liability is NOT on this exam — that is the Casualty-Only license.

Sample Property-Only Practice Questions

Try these sample questions to test your Property-Only exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which element is NOT one of the four requirements of an insurable risk?

A.The loss must be definite and measurable

B.The loss must be due to chance

C.The loss must produce a financial gain

D.The loss must not be catastrophic to the insurer

Explanation: Insurance is designed to indemnify — restore the insured to their pre-loss condition, not to produce a gain. The four classic elements are: definite and measurable loss, fortuitous (due to chance), not catastrophic to the insurer, and a sufficiently large pool of similar exposures.

2An insured owns a home with a market value of $300,000 but a replacement cost of $400,000. The home is destroyed by a covered peril. Under a homeowners policy with adequate replacement-cost coverage and no coinsurance penalty, the insurer will pay:

A.$300,000 — the market value

B.$400,000 — the replacement cost up to the policy limit

C.$350,000 — the average of the two

D.Whichever is less between market value and replacement cost

Explanation: Replacement-cost coverage pays the cost to rebuild with materials of like kind and quality, without deduction for depreciation, up to the policy limit. Market value (which includes land, location, and depreciation) is not the basis for property loss settlement on most homeowners forms.

3Insurable interest in property insurance must exist:

A.Only at the time the policy is issued

B.Only at the time of loss

C.Both at the time of policy issuance and at the time of loss

D.At any time during the policy period

Explanation: Property insurance requires insurable interest at the time of loss — this is the key distinction from life insurance, where insurable interest is required only at policy inception. If you sell your house and it burns down, you collect nothing because you no longer have insurable interest.

4Which of the following best describes a peril?

A.A condition that increases the chance of loss

B.The actual cause of a loss

C.An exclusion in the policy

D.The financial impact of a loss

Explanation: A peril is the actual cause of loss (fire, windstorm, theft). A hazard is a condition that increases the chance or severity of loss. Confusing peril with hazard is one of the most common exam pitfalls.

5An insurance applicant fails to disclose a prior fire loss when applying for a homeowners policy. This is an example of:

A.Concealment

B.Misrepresentation

C.Warranty

D.Waiver

Explanation: Concealment is the failure to disclose a known material fact. Misrepresentation is making a false statement. Both can void coverage if the fact is material. A warranty is a guaranteed statement made part of the contract; a waiver is the voluntary giving up of a known right.

6Actual cash value (ACV) is most commonly defined as:

A.Replacement cost minus depreciation

B.Market value of the property

C.Original purchase price

D.Replacement cost plus appreciation

Explanation: The most widely tested definition of ACV is replacement cost new minus physical depreciation. Some jurisdictions use the broad evidence rule, which considers market value, replacement cost, depreciation, and other factors — but the textbook formula on the exam is replacement cost minus depreciation.

7A wood-shingle roof on a home is an example of a:

A.Moral hazard

B.Morale hazard

C.Physical hazard

D.Peril

Explanation: A physical hazard is a tangible condition that increases the chance or severity of loss — a wood-shingle roof increases fire risk. Moral hazard involves intentional dishonesty; morale hazard is carelessness because insurance exists. A peril is the cause of loss itself (fire).

8Under the principle of indemnity, an insured:

A.Should profit from a covered loss

B.Should be restored to their pre-loss financial condition

C.Receives the full face amount of the policy regardless of actual loss

D.Receives the market value plus a premium for inconvenience

Explanation: Indemnity means making the insured whole — no better, no worse — than before the loss. Property insurance is built on indemnity (with replacement cost being a contractual exception that is still rooted in restoration, not gain).

9Which type of policy lists each covered peril by name and excludes everything else?

A.Open peril (special form)

B.Named peril

C.All-risk

D.Blanket

Explanation: A named-peril policy covers ONLY the perils specifically listed — burden of proof is on the insured to show the loss was caused by a listed peril. An open-peril (special form) policy covers all causes of loss EXCEPT those specifically excluded — burden shifts to the insurer to prove the loss is excluded.

10Subrogation in property insurance allows the insurer to:

A.Cancel a policy mid-term without notice

B.Recover paid claim amounts from a third party legally responsible for the loss

C.Refuse to pay a claim if the insured is partly at fault

D.Increase premiums after a single claim

Explanation: Subrogation is the insurer's right to step into the shoes of the insured after paying a claim and pursue the third party who caused the loss. It supports the principle of indemnity by preventing the insured from collecting twice (once from the insurer, once from the at-fault party).

About the Property-Only Exam

The Property-Only insurance license exam covers personal and commercial property coverages — homeowners property sections, dwelling fire, CP commercial property forms, inland and ocean marine, crime, and equipment breakdown. It excludes liability and casualty topics, which require a separate Casualty-Only license in states that split P&C.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$50-75 (State Insurance Commissioner / Pearson VUE or PSI)

Property-Only Exam Content Outline

10%

General Property Insurance Principles

Insurable interest, indemnity, hazards, perils, ACV vs replacement cost

20%

Homeowners (Section I Property)

HO-2, HO-3, HO-5, HO-8 property coverages, named vs open perils, exclusions

15%

Dwelling Fire (DP-1, DP-2, DP-3)

DP forms, ACV vs replacement cost, broad and special perils, vacancy

20%

Commercial Property (CP forms, BOP property)

CP 00 10 building and personal property, causes of loss forms, business income, BOP

10%

Inland & Ocean Marine

Filed (controlled) vs non-filed (uncontrolled), nationwide marine definition, general average

10%

Crime, Equipment Breakdown & Other Property

Commercial crime forms, employee theft, computer fraud, equipment breakdown, builders risk

10%

Property Endorsements

CP 04 05 ordinance or law, CP 04 40 spoilage, HO scheduled personal property

Regulations & Ethics

Producer licensing, unfair claims practices, fair claims handling, fiduciary duty

How to Pass the Property-Only Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours
Exam fee: $50-75

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-Only Study Tips from Top Performers

1Memorize the HO form ladder: HO-2 named perils on dwelling and contents, HO-3 open perils on dwelling but named on contents, HO-5 open on both, HO-8 ACV market-value form for older homes

2Drill the dwelling fire ladder: DP-1 basic ACV, DP-2 broad replacement cost, DP-3 special open perils on dwelling — and remember DP forms have NO theft coverage on the basic form

3Master the CP coinsurance penalty: (Did/Should) x Loss - Deductible. The 80% coinsurance rule on CP 00 10 and HO is one of the most-tested calculation patterns

4Know inland marine filed vs non-filed: filed (controlled) lines are state-rate-regulated; non-filed (uncontrolled) like jewelers block, builders risk, and motor truck cargo allow flexible terms

5Stay strictly on the property side when studying — auto, CGL, workers comp, and umbrella are casualty topics and are NOT tested on this exam

Frequently Asked Questions

What is the difference between the Property-Only license and the full Property & Casualty license?

The Property-Only license covers physical property losses — homeowners property sections, dwelling fire, commercial property, inland and ocean marine, and crime. It does NOT cover liability or casualty topics like auto liability, CGL, or workers compensation — those require a separate Casualty-Only license. States that issue P&C as a single combined license test both sides on one exam; states like AR, LA, MI, and MS split them so producers can hold one or the other.

Who administers the Property-Only insurance exam?

The exam is administered through your state insurance department, with delivery typically handled by Pearson VUE or PSI. The content outline is national (Pearson VUE Property), and most states append a state-law section. Confirm your administrator on your state DOI website before scheduling.

What does the Property-Only exam cover?

Personal property (homeowners Section I, dwelling fire DP-1/DP-2/DP-3), commercial property (CP forms, BOP property portion), inland marine (filed and non-filed), ocean marine, crime, equipment breakdown, builders risk, and property-side endorsements like CP 04 05 ordinance or law. Liability/casualty topics are excluded.

How many questions are on the Property-Only exam?

Most states use approximately 85-125 questions split across a national property section and a state-law section. You typically have 2 hours and need 70% to pass. Exact counts vary by state — check your state DOI candidate handbook.

What is the structure of the Property-Only exam?

Multiple-choice (4 options each), computer-based testing at Pearson VUE or PSI centers (some states allow online proctoring). The national portion follows the Pearson VUE Property content outline; the state portion covers state insurance code and producer regulations. Both sections must usually be passed in one sitting.

What career path follows a Property-Only license?

Most producers add a Casualty-Only license shortly after to handle full P&C accounts (auto, liability, workers comp). You can also stack designations like ARM, CIC, or CPCU. In split-license states a Property-Only license is enough to write personal homeowners, dwelling fire, and commercial property business as a specialist.