Free Practice
Real questions in the style of the Alaska Property & Casualty licensing exam, pulled straight from the TESTivity course, each with a plain-English explanation. Start with the Alaska-specific rules below, then work the rest, and unlock the full simulator when you're ready to drill.
That's right — 40% of test-takers do not pass the Alaska Property & Casualty exam on their first attempt. Make sure you're part of the 60% who do.
First-time pass rate: 60% · Source: NAIC, 2024 (most recent available statistics) · Basis: Property + Casualty exams combined
Question 1
In Alaska, how many hours of continuing education must a resident producer complete each 2-year renewal period (including 3 hours of ethics)?
Alaska follows the standard NAIC model: 24 hours of CE every 2 years, including 3 hours of ethics. The 20-hour figure is Alaska's Life pre-licensing requirement, not CE. Hook: AK CE is 24 every 2 years, 3 of them ethics.
Question 2
The Alaska Division of Insurance is headed by a Director of Insurance who is:
Alaska's Director of Insurance is appointed by the Governor and serves at the Governor's pleasure, enforcing Title 21 of the Alaska Statutes within the Division of Insurance (part of the Department of Commerce, Community, and Economic Development). Hook: in Alaska, the Governor appoints the Director of Insurance.
Question 3
In Alaska, how many days of advance notice must an insurer give before nonrenewing a personal automobile policy?
Alaska requires at least 20 days advance notice to nonrenew a personal auto policy (no reason required), versus 45 days for homeowners nonrenewal. Hook: AK auto nonrenewal is just 20 days - homeowners gets the longer 45.
Question 4
What are Alaska's minimum automobile liability limits - the highest of any state in this manual?
Alaska requires minimum auto liability of 50/100/25 - the highest BI minimums in the manual, double the 25/50 used by Arizona, Colorado, and Georgia, reflecting Alaska's high medical costs. Alaska is fault-based with no mandatory PIP, and UM is mandatory on every policy. Hook: AK minimum auto is a steep 50/100/25 - the highest in the manual.
Question 5
Alaska's insurance guaranty associations protect policyholders of insolvent insurers. Which insurers' policyholders are covered?
Guaranty association protection covers policyholders of admitted insurers only; surplus lines and non-admitted carriers are excluded, and the fund may never be used as a sales inducement. Hook: guaranty funds back admitted insurers only - never surplus lines.
Question 6
Under Alaska's prompt-payment law, within how many days must an insurer pay a clean ELECTRONIC claim?
Alaska requires clean electronic claims paid within 30 days and clean paper claims within 45 days, with interest on late payments. Hook: AK prompt pay is 30 days electronic, 45 days paper.
Question 7
Alaska's workers' compensation temporary total disability (TTD) benefit is distinctive because it replaces:
Alaska replaces 80% of spendable (after-tax) wages for TTD - notably higher than the 66 2/3%-of-gross standard used by most states - reflecting Alaska's high cost of living. All employers with one or more employees must carry coverage. Hook: AK workers' comp pays a rich 80% of after-tax wages - the most generous TTD in the manual.
Question 8
The Terrorism Risk Insurance Act (TRIA) created:
TRIA set up a federal program that shares the cost of large insured losses from certified acts of terrorism, stabilizing a market private insurers were reluctant to cover alone after 2001. Hook: TRIA is the federal backstop for terrorism losses.
Question 9
Under TRIA, insurers writing certain commercial property and casualty lines must:
TRIA requires insurers in covered commercial lines to make terrorism coverage available to insureds, who may accept or decline it. Hook: TRIA forces insurers to offer terrorism coverage, the insured decides whether to take it.
Question 10
The National Flood Insurance Program (NFIP) is a federal program that:
The NFIP offers federally backed flood insurance in communities that agree to adopt and enforce floodplain management rules, filling a gap standard property policies exclude. Hook: NFIP brings flood coverage to communities that follow floodplain rules.
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Question 1
The principle of indemnity is best described as:
Indemnity is the whole heartbeat of insurance: you get made whole, not rich. The goal is to put you back where you were financially right before the loss, no better, no worse. That's why you can't insure a $20,000 car for $80,000 and cash in. Insurance reimburses a loss; it doesn't hand out winnings.
Question 2
Which of the following is a characteristic of an ideally insurable risk?
Insurers like risks that are accidental (due to chance, not intentional) and definite and measurable (you can pin down when, where, and how much). Add in 'predictable for large groups,' 'not catastrophic to the insurer,' and 'affordable premium,' and you've got the recipe for an insurable risk. A loss someone causes on purpose? Not insurable.
Question 3
In a reinsurance transaction, the insurer that transfers risk to the reinsurer is known as the:
The company giving away (ceding) the risk is the ceding company; the company taking it on is the reinsurer. Easy hook: to 'cede' is to give up, so the one giving up the risk is the ceding company.
Question 4
A stock insurance company is owned by its:
A stock insurer is owned by its stockholders (shareholders), who receive taxable dividends when the company profits. Policyholders are just customers. Contrast that with a mutual insurer, which is owned by its policyholders. Stock equals stockholders; mutual equals members/policyholders.
Question 5
Policyholder dividends paid by a mutual insurer are:
A mutual insurer is owned by its policyholders, so a 'dividend' is really a return of overpaid premium, which is why it's generally not taxable. And it's never guaranteed; it depends on the company's results. Stock dividends, by contrast, go to stockholders and are taxable.
Question 6
An insurer that has been granted a certificate of authority to do business in a state is known as a(n):
An admitted (or authorized) insurer holds a certificate of authority from the state and plays by that state's rules. A non-admitted (unauthorized) insurer hasn't been granted one, which is where surplus lines come in for hard-to-place risks. Also worth knowing: domestic equals home state, foreign equals another state, alien equals another country.
Question 7
The authority that the public reasonably believes an agent has, based on the insurer's actions, is called:
Apparent authority is about appearances: what a reasonable customer believes the agent can do based on how the insurer let the agent act (business cards, signage, company applications). Express authority is spelled out in the contract; implied is what's needed to carry out the express. Apparent is the 'looks legit' bucket.
Question 8
Because an insurance policy is drafted by the insurer and offered to the applicant on a 'take it or leave it' basis, it is classified as a contract of:
A contract of adhesion is written by one party (the insurer) and accepted as-is by the other, with no line-by-line negotiating. The practical kicker: because the insured didn't get to write it, any ambiguity is interpreted in the insured's favor. That's a courtroom rule worth knowing.
Question 9
An insurance contract is described as 'aleatory' because:
Aleatory means the exchange of value can be lopsided and depends on chance. You might pay $600 in premium and collect $200,000 on a claim, or pay for years and never file one. That built-in inequality, hinging on whether a loss happens, is what makes the contract aleatory.
Question 10
Which of the following is NOT one of the four essential elements of a valid contract?
The four elements are agreement (offer and acceptance), consideration, competent parties, and legal purpose. A notarized signature isn't on the list, so it's the odd one out. Consideration, by the way, is what each side brings to the table: the insured's premium and the insurer's promise to pay.
Question 1
Under an agreed value method, the insurer and insured do what?
With agreed value, the parties set the insured amount up front (often for hard-to-value items like fine art), and that agreed figure is paid for a total loss, with the coinsurance requirement waived. Hook: agreed value locks in the payout amount ahead of time, no coinsurance fight later.
Question 2
A key difference between a named perils policy and an open perils (special form) policy involves the burden of proof. Under an open perils policy, who carries the burden regarding coverage?
Under named perils, the insured must show the loss was caused by a listed peril. Under open perils (all-risk or special form), coverage is presumed unless the insurer proves an exclusion applies, so the burden shifts to the insurer. Open perils is the broader coverage. Hook: named perils, the insured proves it's covered; open perils, the insurer proves it's excluded.
Question 3
A direct loss in property insurance is best described as what?
A direct loss is the immediate physical damage a peril causes, like a fire burning a building. It contrasts with indirect (consequential) losses that follow from it. Hook: direct loss is the physical damage itself, the fire burning the house.
Question 4
A deductible in a property policy primarily does what?
The deductible is the amount the insured absorbs on each loss, which screens out small, frequent claims and reduces the premium. Hook: the deductible knocks out the small stuff and trims your premium.
Question 5
Liability insurance is also known as third-party coverage because it pays whom?
Property insurance is first-party (it pays the insured for their own loss), while liability insurance is third-party: it pays others the insured has harmed and is legally responsible to. The three parties are the insured, the insurer, and the injured third party. Hook: liability pays the third party you injured, not yourself.
Question 6
Negligence is best defined as what?
Negligence is the failure to act with the care a reasonable, prudent person would under the same circumstances. It's the foundation of most liability claims and is unintentional, unlike an intentional tort. Hook: negligence is falling short of the reasonable-person standard of care.
Question 7
Under a comparative negligence rule, how is a claimant's recovery affected if they were partly at fault?
Comparative negligence reduces the claimant's award by their percentage of fault, so someone 30% responsible recovers 70% of their damages. It's more forgiving than the older contributory negligence rule, which could bar recovery entirely for any fault at all. Hook: comparative negligence trims your recovery by your share of the blame.
Question 8
Under a pro rata other insurance provision, when two policies cover the same loss, each insurer pays what?
A pro rata provision splits a loss among insurers in proportion to each policy's limit, so a policy carrying half the total coverage pays half the loss. It keeps the insured from collecting more than the actual loss. Hook: pro rata splits the loss by each policy's share of the total limits.
Question 9
Under most property policies, the insured generally may NOT do what after a loss?
Property policies typically prohibit abandonment: the insured can't simply dump damaged property on the insurer and demand the full amount. The insurer decides whether to repair, replace, or pay. Hook: you can't abandon the wreck to the insurer and demand a full check.
Question 10
A morale hazard is best described as what?
A morale hazard is an attitude of carelessness: a person takes fewer precautions simply because they know insurance will cover any loss (the why-worry-I'm-insured mindset). It differs from a moral hazard, which involves outright dishonesty. Hook: morale hazard is carelessness from having coverage; moral hazard is dishonesty.
Question 1
Coverage B (Other Structures) typically insures detached structures for an amount equal to what?
Coverage B insures detached structures such as a garage, shed, or fence, usually for 10% of the Coverage A limit. The owner can raise it by endorsement if needed. Hook: Coverage B is detached structures, normally 10% of the dwelling limit.
Question 2
A homeowners policy is divided into two sections. Section I and Section II cover, respectively:
Section I is the property side, Coverages A through D (dwelling, other structures, personal property, loss of use). Section II is the liability side, Coverages E and F (personal liability and medical payments). Hook: Section I is property A through D; Section II is liability E and F.
Question 3
Coverage E (Personal Liability) pays for what?
Coverage E pays sums the insured is legally liable for when they cause bodily injury or property damage to others, and it also pays the cost of legal defense. It is third-party coverage. Hook: Coverage E covers what you owe others when you are legally liable.
Question 4
Coverage F (Medical Payments to Others) differs from Coverage E in that Coverage F pays:
Coverage F is a no-fault, goodwill coverage that pays reasonable medical expenses for others accidentally injured on the insured's premises, regardless of fault, which often heads off a larger liability claim. Coverage E, by contrast, requires legal liability. Hook: Coverage F pays guests' medical bills no-fault; Coverage E needs you to be legally liable.
Question 5
Coverage F (Medical Payments to Others) does NOT cover the medical expenses of whom?
Medical Payments covers others, not the named insured or regular household residents. Their own injuries fall outside this coverage and would be handled by their own health insurance. Hook: Coverage F is for others, never the insured or household members.
Question 6
Personal liability coverage (Coverage E) under a homeowners policy generally applies:
Coverage E follows the insured, applying worldwide to liability arising out of personal, non-business activities, not just incidents on the residence premises. Hook: your personal liability travels with you worldwide, not just at home.
Question 7
Coverage C (Personal Property) covers the insured's belongings:
Coverage C follows the insured's personal property anywhere in the world, so belongings are covered while traveling or temporarily off premises, often subject to a percentage limit when away from home. Hook: your stuff is covered worldwide, not only at the house.
Question 8
A standard homeowners policy (such as HO-3) generally requires that:
Standard homeowners forms require the dwelling to be owner-occupied, meaning it is the insured's residence. Non-owner-occupied or rental dwellings are insured under a dwelling policy instead. Hook: homeowners forms are for owner-occupied homes; rentals go on a dwelling policy.
Question 9
Earthquake and other earth movement losses under a standard homeowners policy are:
Earth movement, including earthquake, is excluded by the standard homeowners policy, but the insured can usually add earthquake coverage by endorsement or buy a separate earthquake policy. Hook: earthquake is excluded but can be bought back by endorsement.
Question 10
An ordinance or law endorsement helps pay for what?
After a covered loss, current building codes may require costlier rebuilding than the original construction. An ordinance or law endorsement covers that added expense, which the base policy may limit or exclude. Hook: ordinance or law pays the code-upgrade costs when you rebuild.
Question 1
The Personal Auto Policy (PAP) is divided into several parts. Part A provides which coverage?
Part A is Liability Coverage, the part that pays for bodily injury and property damage the insured causes to others. It is the core of the auto policy and the coverage states require. Hook: Part A is liability, what you owe others, and it comes first in the PAP.
Question 2
A combined single limit (CSL) auto liability policy differs from a split-limit policy in that it:
A combined single limit gives one pool of money per accident that can be used for bodily injury and property damage in any combination, instead of separate per-person and per-accident caps. It offers more flexibility on large losses. Hook: combined single limit is one bucket for everything per accident.
Question 3
In addition to paying damages up to the limit, auto liability coverage typically also provides:
Liability coverage includes the insurer's duty to defend the insured against covered claims, and those defense costs are usually paid in addition to the policy limits, not subtracted from them. Hook: liability buys you a lawyer, and the defense cost normally sits on top of your limit.
Question 4
Under the PAP, Medical Payments coverage for the named insured and family members applies:
For the named insured and resident family members, Med Pay follows the person: it applies when they are struck by a vehicle as pedestrians or while riding in other autos, not only in the insured's car. Other passengers are covered while occupying the insured auto. Hook: for you and your family, Med Pay follows the person, not just the car.
Question 5
Uninsured motorist bodily injury coverage generally covers:
UM bodily injury pays for the insured's injuries caused by an at-fault driver who is uninsured or who flees the scene. Whether UM also covers property damage varies by state. Hook: UM-BI is for your injuries when the other driver is uninsured or a hit-and-run.
Question 6
A deductible on physical damage (collision or comprehensive) coverage is:
A deductible is the insured's share of each physical damage loss, paid before the insurer pays the remainder. Choosing a higher deductible lowers the premium. Hook: the deductible is your slice of the loss you pay first.
Question 7
Physical damage losses to the insured's vehicle are generally settled on what basis?
Auto physical damage is normally paid on an actual cash value basis, which is replacement cost minus depreciation, reflecting the car's worth at the moment of loss. Vehicles lose value over time, so ACV is usually less than what was paid. Hook: cars are paid ACV, depreciated value, not what you paid for them.
Question 8
The newly acquired auto provision in the PAP:
The newly acquired auto rule automatically extends the policy to a car the insured buys during the term, for a limited window (commonly up to 14 days), so the insured is not driving uninsured before reporting it. Hook: buy a new car and you get an automatic grace period to add it.
Question 9
A temporary substitute auto, such as a loaner driven while the insured's car is in the shop, is generally:
A temporary substitute auto used because the insured's vehicle is out of service for repair, service, breakdown, or loss is treated as a covered auto, so the policy's coverages extend to it. Hook: a loaner while yours is being fixed is covered like your own car.
Question 10
In a no-fault auto insurance state, an injured person's own:
In a no-fault system, each injured party turns to their own Personal Injury Protection coverage for medical bills and related expenses without first proving who was at fault, which speeds payment and limits lawsuits. Hook: no-fault means you collect from your own PIP, no blame needed.
Question 1
How does a dwelling policy differ from a homeowners policy regarding liability coverage?
Unlike the homeowners policy, the dwelling policy is primarily a property form and does not build in personal liability. An insured who wants it adds a liability endorsement. Hook: the DP is property-only out of the box; liability is a bolt-on.
Question 2
The DP-1 (Basic Form) covers the dwelling on what basis?
The DP-1 is the narrowest form: it insures a short list of named perils and generally pays losses on an actual cash value basis (replacement cost minus depreciation). Hook: DP-1 is basic, named perils paid at ACV.
Question 3
The DP-3 (Special Form) covers the dwelling and other structures on what basis?
The DP-3 Special Form insures the dwelling and other structures on an open-perils basis, meaning all causes of loss are covered except those specifically excluded. It is the broadest of the dwelling forms. Hook: DP-3 is special, open perils on the structure.
Question 4
Coverage C under a dwelling policy insures:
Coverage C is personal property belonging to the named insured. On a rental dwelling it covers the owner's property at the location, not the tenant's belongings, which the tenant insures separately. Hook: Coverage C is personal property, the insured's stuff.
Question 5
The DP-1 Basic Form, in its most basic version, covers which perils?
In its base form the DP-1 covers fire, lightning, and internal explosion. Extended Coverage and optional endorsements broaden it from there. Hook: the bare DP-1 starts with fire, lightning, and internal explosion.
Question 6
Adding Extended Coverage (EC) to a DP-1 broadens it to include perils such as:
Extended Coverage adds the classic EC perils: windstorm, hail, explosion, riot and civil commotion, aircraft, vehicles, and smoke. Flood, earthquake, and war stay excluded. Hook: EC adds the WHARVES-style perils, wind, hail, aircraft, riot, vehicles, explosion, smoke.
Question 7
Under a DP-3 Special Form, personal property (when covered) is insured on what basis?
Like the HO-3, the DP-3 splits its basis: the dwelling and other structures get open perils, but personal property is covered on a named-perils basis. Hook: DP-3 is open perils on the building, named perils on the contents, just like HO-3.
Question 8
Losses to the dwelling under a DP-1 Basic Form are generally settled on what basis?
The DP-1 settles dwelling losses at actual cash value, which deducts depreciation from replacement cost. The broader DP-2 and DP-3 can pay full replacement cost when the insured-to-value condition is met. Hook: DP-1 pays ACV; step up to DP-2 or DP-3 for replacement cost.
Question 9
A dwelling insured under a DP-3 to at least the required percentage of replacement cost suffers a partial fire loss. The dwelling loss is generally settled:
When a DP-2 or DP-3 dwelling is insured to the required percentage of replacement cost (commonly 80%), partial losses are paid at replacement cost without a depreciation deduction. Underinsuring drops the insured back toward ACV or a prorated amount. Hook: insure a DP-3 to value and partial losses pay full replacement cost.
Question 10
Of the standard dwelling forms, the one providing the narrowest coverage is:
The DP-1 Basic Form sits at the bottom of the ladder, with the fewest perils and ACV settlement. The DP-2 is broader and the DP-3 is broadest. Hook: DP-1 is the floor, the narrowest dwelling form.
Question 1
Which of the following is a common advantage of writing coverages in a package policy rather than separate monoline policies?
Packaging usually lowers the premium (a package credit) and reduces the chance of gaps or overlaps between separately written policies. It does not erase deductibles, conditions, or exclusions. Hook: packages save money and close the gaps between separate policies.
Question 2
The Common Policy Declarations in a CPP show:
The common declarations identify who and what is insured: named insured, mailing address, policy period, a list of the coverage parts in the package, and the premium for each. Hook: the common dec is the who, when, and what of the whole package.
Question 3
Under the Common Policy Conditions, the insurer's right to inspect the insured's premises and operations is found in the:
The Inspections and Surveys condition reserves the insurer's right (but not a duty) to inspect the premises and operations and to make safety recommendations. Hook: the right to walk the premises lives in Inspections and Surveys.
Question 4
A commercial insured wants to cancel its CPP mid-term. Under the standard Common Policy Conditions, how is cancellation handled?
The first named insured may cancel by mailing or delivering notice, and the insurer may cancel by sending advance written notice (the number of days is set by the condition and state law). The first named insured acts on behalf of all insureds. Hook: the first named insured cancels by notice; the insurer cancels with advance written notice.
Question 5
Under the BPP, Your Business Personal Property includes:
Business personal property is the contents the business owns and uses: furniture, fixtures, machinery, equipment, and stock (inventory) located at the described premises. The building itself is insured separately. Hook: business personal property is the contents, furniture, fixtures, machinery, and stock.
Question 6
Under the BPP, property of others left in the insured's care, custody, or control is:
The BPP has a separate Personal Property of Others category for property of others in the insured's care, custody, or control, such as customers' goods left for service. Hook: customers' property in your care goes under Personal Property of Others.
Question 7
The Special causes-of-loss form provides:
The Special form is open perils: it covers all causes of loss except those specifically excluded, making it the broadest causes-of-loss form. Basic and Broad are named-perils. Hook: Special form is open perils, the broadest of the three.
Question 8
Extra expense coverage pays for:
Extra expense pays the added costs of staying open or reopening sooner, such as renting a temporary location or leasing equipment, which can reduce the business income loss. Hook: extra expense is the money spent to keep the doors open after a loss.
Question 9
CGL Coverage B insures:
Coverage B covers personal and advertising injury offenses: libel, slander, false arrest, wrongful eviction, and infringing on copyright or slogans in the insured's advertising. Hook: Coverage B is the reputation and advertising offenses, libel and slander.
Question 10
An occurrence-based CGL form covers claims for injury or damage that:
An occurrence form responds based on when the injury or damage took place. If it happened during the policy period, it is covered even if the claim surfaces years later. Hook: occurrence form looks at when it happened, not when it is reported.
Question 1
The main difference between a BOP and a Commercial Package Policy (CPP) is that the BOP:
Where the CPP is built piece by piece and fits businesses of any size, the BOP is a ready-made bundle designed for eligible small to mid-size firms, trading flexibility for simplicity. Hook: CPP is build-your-own; BOP is the ready-made small-business bundle.
Question 2
Which type of business is typically ELIGIBLE for a BOP?
Classic eligible BOP classes include small offices, retail and mercantile stores, and apartment buildings. Auto dealers, financial institutions, and heavy manufacturers fall outside the eligible classes. Hook: offices, shops, and apartments are bread-and-butter BOP risks.
Question 3
Buildings and business personal property under a BOP are commonly valued on what basis?
BOPs typically settle covered property losses on a replacement cost basis, paying to repair or replace without deducting depreciation, which is a selling point over ACV forms. Hook: BOP property is usually replacement cost, no depreciation taken.
Question 4
Unlike many commercial property forms, the BOP property coverage generally:
A defining simplification of the BOP is that it usually has no coinsurance clause, so the insured is not penalized for underinsuring the way a coinsurance form would penalize them. Insuring to value is still wise but not enforced by a coinsurance penalty. Hook: the BOP drops the coinsurance clause, no did/should penalty.
Question 5
Because business income is built into the BOP, a small business owner benefits by:
Built-in business income means a covered shutdown is protected by default, which guards against the common small-business mistake of forgetting to purchase interruption coverage. Hook: built-in business income protects owners who would otherwise forget to buy it.
Question 6
Professional liability (errors and omissions) for a business is:
BOPs do not cover professional liability; a business needing errors and omissions protection buys a separate professional liability policy or specific endorsement. Hook: E&O is not in the BOP, that needs its own professional liability policy.
Question 7
Like other property policies, a BOP typically excludes:
Flood and earth movement (including earthquake) are excluded under a BOP just as under other property forms, and must be insured separately. Fire, theft, and vandalism are typically covered. Hook: BOP still excludes flood and earthquake, buy those separately.
Question 8
Apartment buildings, offices, and small retail (mercantile) risks are examples of:
Apartments, offices, and small mercantile (retail) operations are the staple eligible classes the BOP was designed for. Hook: apartments, offices, and small retail are the textbook eligible BOP classes.
Question 9
Business personal property under a BOP includes the insured's:
Business personal property is the contents the business owns and uses, furniture, fixtures, machinery, equipment, and stock, at the described premises. The building is separate, and licensed autos are excluded. Hook: BPP is the contents, furniture, fixtures, machinery, and stock.
Question 10
A business grows too large or complex to qualify for a BOP. The most appropriate alternative is usually:
When a business outgrows BOP eligibility, it moves to a CPP, which can be assembled from the coverage parts the larger or more complex operation requires. Hook: outgrow the BOP and you graduate to a CPP.
Question 1
Workers compensation insurance provides benefits to:
Workers compensation pays benefits to employees who are injured or become ill because of their job. It is employee coverage, not customer or personal coverage. Hook: workers comp is for employees hurt on the job.
Question 2
Besides sudden accidental injuries, workers compensation also covers:
Workers compensation covers not just sudden accidents but also occupational diseases, illnesses that develop from job conditions over time, such as repetitive stress or exposure to harmful substances. Hook: comp covers both the sudden accident and the slow occupational disease.
Question 3
An employee is injured while commuting from home to work in their own car before clocking in. This injury is generally:
Under the going-and-coming rule, an ordinary commute is normally not in the course of employment, so a commuting injury usually is not covered (special exceptions can apply, such as travel that is part of the job). Hook: the normal commute is off the clock for comp purposes.
Question 4
An employee is hurt while intoxicated and violating a clear safety rule. Under many state workers compensation laws, benefits may be:
Although comp is no-fault, most statutes still allow benefits to be reduced or denied where the injury results from the worker's intoxication or willful misconduct. No-fault does not mean no defenses. Hook: no-fault still has limits, intoxication and willful misconduct can cut benefits.
Question 5
The workers compensation benefit that replaces lost wages while an injured worker cannot work at all but is expected to recover and return is:
Temporary total disability (TTD) replaces a portion of wages while the worker is fully unable to work but is expected to recover and return. Once recovery plateaus, the case may move to a permanent classification. Hook: temporary total is off work now, expected back later.
Question 6
If a worker dies from a covered job injury, workers compensation generally provides:
A fatal work injury triggers death benefits to the worker's surviving dependents (often a percentage of wages) along with a burial or funeral allowance set by statute. Hook: a fatal claim pays the dependents plus a burial allowance.
Question 7
An experience modification factor (experience mod) adjusts a workers compensation premium based on:
The experience mod compares an employer's actual losses with those expected for its class. A mod above 1.0 raises premium, below 1.0 lowers it, rewarding good safety records. Hook: the experience mod credits or debits you for your own loss history.
Question 8
In a monopolistic fund state, an employer must buy workers compensation insurance from:
In a monopolistic state, workers compensation must be purchased from the state fund, and private insurers do not write the coverage there. Hook: monopolistic means one seller, the state fund.
Question 9
The federal law that provides workers compensation-type benefits to longshore and harbor workers is the:
The Longshore and Harbor Workers Compensation Act (USL&H) covers maritime workers such as longshoremen and harbor workers who fall outside state workers comp. The Jones Act covers seamen and FELA covers railroad workers. Hook: dockworkers fall under USL&H, the Longshore act.
Question 10
The fundamental trade-off at the heart of workers compensation is that the employee receives prompt, guaranteed benefits in exchange for:
The core bargain is certainty for the worker (guaranteed no-fault benefits) traded for giving up the right to sue the employer, which also caps the employer's exposure. Hook: certain benefits for the worker, no lawsuit for the employer, that is the deal.
Question 1
Standard homeowners and dwelling policies exclude flood, so flood coverage is usually obtained through:
Because flood is excluded from standard property forms, owners buy it through the NFIP or a private flood insurer. Hook: flood is its own policy, NFIP or private, never the homeowners form.
Question 2
The National Flood Insurance Program is:
The NFIP is a federal program run through FEMA, offering flood insurance in communities that adopt and enforce floodplain management rules. Private insurers may sell and service it under write-your-own arrangements. Hook: NFIP is federal flood insurance, available where the community participates.
Question 3
An insured wants protection against earthquake damage to their home. The most accurate statement is:
Standard property forms exclude earth movement, but earthquake coverage can be added by endorsement or bought separately, commonly with a deductible expressed as a percentage of the dwelling limit rather than a flat dollar amount. The NFIP covers flood, not quake. Hook: earthquake is excluded but buy-back-able, usually with a percentage deductible.
Question 4
The ocean marine coverage that protects the vessel owner against liability to others, such as injury to crew or damage to other vessels, is:
Protection and indemnity (P&I) is the liability portion of ocean marine, covering the owner's legal liability for bodily injury and property damage arising from the vessel, including crew injury and damage to other ships. Hull covers the vessel, cargo covers the goods, P&I covers the liability. Hook: P&I is the liability piece of ocean marine.
Question 5
Despite its name, inland marine insurance today mostly covers:
Inland marine grew out of ocean marine to cover property that moves over land or is hard to insure at a fixed site, plus transportation instrumentalities like bridges and tunnels. Hook: inland marine is property on the move over land, not on the sea.
Question 6
Aircraft are excluded under standard homeowners and auto policies, so aviation exposures require:
Aviation risks (hull and liability for aircraft) are excluded from standard personal lines and must be written on specialized aviation policies. Hook: planes need aviation insurance, never the home or auto policy.
Question 7
A Difference in Conditions (DIC) policy is typically used to:
A DIC policy is written alongside basic property coverage to fill gaps, commonly adding catastrophic perils such as flood and earthquake that the underlying policy excludes. It supplements rather than replaces. Hook: DIC fills the holes, often adding flood and quake to a property program.
Question 8
Title insurance protects a property owner or lender against:
Title insurance covers losses from title defects, such as liens, errors in records, or competing ownership claims, that already existed but surface after the property is bought. Hook: title insurance protects against ownership defects hiding in the property's past.
Question 9
A distinctive feature of title insurance compared with most property insurance is that it:
Most insurance covers future accidental losses, but title insurance looks backward, covering title defects that already exist, and it is paid for with a one-time premium at closing. Hook: title insurance is paid once and looks backward at past defects.
Question 10
Farm and ranch coverage is distinctive because it can combine, in one program:
A farm policy blends personal and business exposures, covering the farm dwelling and personal property along with barns, equipment, livestock, and farm liability, because a farm is both a home and a business. Hook: farm coverage mixes the home and the business under one roof.
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