FREE P&C Practice Exam: Auto Insurance Questions (Property & Casualty Study Guide): WITH DETAILED ANSWER KEY
- pandcpacademy
- 4 days ago
- 6 min read
Pass Your Property & Casualty (P&C) Exam with Confidence
Passing the Property and Casualty (P&C) insurance exam can feel overwhelming at first—but it doesn’t have to be.
Most students struggle not because the material is impossible, but because they are studying the wrong way.
This FREE P&C practice exam (Auto Insurance section) is designed to help you:
Test your knowledge
Identify weak areas
Understand how real exam questions are structured
👉 When you’re finished, continue your preparation with full-length practice exams and step-by-step video lessons (over 12 hours of video lessons) - Including the full Auto Chapter and every other P&C Exam Chapter —So you’re fully prepared to pass your Property and Casualty Exam with confidence.
Passing the Property and Casualty (P&C) exam can feel like climbing a mountain. But here’s the good news: You don’t have to do it alone! I’ve been there, and I know exactly what it takes to succeed. Whether you’re just starting out or have been struggling to pass, this practice exam will help test your knowledge and give you a boost!
Why Memorization Alone Won’t Help You Pass the P&C Exam
A common mistake students make is trying to memorize definitions without truly understanding them.
The P&C exam does NOT just test memorization. It tests your ability to:
Apply insurance concepts to real-life scenarios
Understand how coverage works
Analyze exam-style questions under pressure
That’s why effective studying must include practice questions, review, and explanation—not just reading notes.
How to Study Smart for Your P&C Exam
To improve your chances of passing, follow this proven system:
Read your study material thoroughly
Watch structured video lessons
Take notes while learning (focus on understanding, not copying)
Take practice exams to apply what you learned
Review incorrect answers carefully
👉 Success comes from consistency—not cramming.
Important: These FREE practice questions give you a preview of what to expect on the exam. To unlock all 120+ practice questions with detailed explanations, and video lessons for each P&C chapter (over 12 hours of video lessons) - Plus video breakdown explanations for your practice exam) - Get the complete on-demand program here.
Free P&C Practice Exam Questions to Test Your Knowledge
Test your understanding of real exam-style Auto Insurance questions below.
Question 1
The following losses are excluded from coverage on a Personal Auto Policy EXCEPT:
A. Replacement of an engine that threw a piston while the car was being operated.
B. A broken window caused by someone who broke it to steal a radar detector
C. Theft of a stereo player the insured hooked up in the trunk of his vehicle
D. Damage to special carpeting the insured installed in his van.
✅ Answer: B
Explanation: PAP's generally exclude mechanical breakdown & custom equipment (IE: Engine failure, special carpeting, stereo player)
Radar Detector: Generally excluded, too as custom equipment, however, the vehicle damage (Broken glass) from the theft-related loss IS covered making B the correct answer as the COVERED loss.
Question 2
What is the name of the Federal Law that requires all Commercial Carriers to carry liability coverage in the event they cause bodily injury or property damage?
A. The Motor Carrier Act of 1980
B. The Motor Carrier Act of 1998
C. MCS-90 Act
D. The Jones Act
✅ Answer: A
Explanation: The Motor Carrier Act of 1980 establishes minimum financial responsibility requirements for commercial motor carriers. See Question 4!
Don't confuse with the MCS-90 - Endorsement for motor carrier to prove financial responsibility for public liability.
The Motor Carrier Act of 1980 is the Federal Law & the MCS-90 is the endorsement
Question 3
Ricky fell asleep while driving, causing his car to drift into the next lane and collide with Joan’s car, which then went into a ditch. In a no-fault state, which driver’s insurance would cover Joan’s medical expenses?
A. Ricky's insurance will pay up to limits, then Joan's insurance will pay any additional amounts.
B. Joan's insurance will pay.
C. Joan's insurance will pay, then Ricky's insurance will pay any additional amounts.
D. Ricky's insurance will pay all damages.
✅ Answer: B
Explanation: With no-fault insurance, an insured driver is reimbursed for his/her own insurance company for medical costs and loss of wages regardless of who is at fault in the accident. Subrogation against the other driver or insurance company is not allowed.
HINT: Look at the question at who was injured, that's who's insurance will pay.
Question 4
What coverage is needed by a trucking company to provide public liability in the event of a pollution spill and the required cleanup?
A. Broad Form Property Damage Coverage Endorsement
B. Motor Carrier Form
C. Environmental Impact Broad Form Coverage
D. MCS-90 Endorsement
✅ Answer: D
Explanation: The MCS-90 endorsement provides required liability coverage for certain hazardous situations involving commercial carriers. See Question 2!
Don't confuse with the Motor Carrier Act of 1980! These are easy to mix up on the exam!
REMEMBER: The Motor Carrier Act of 1980 is the Federal Law & the MCS-90 is the endorsement
Question 5
First party benefits cannot be paid to:
A. The owner of a recreational vehicle not intended for use on highways
B. Occupants of the insured’s motor vehicle
C. An insured who is not first named
D. Anyone who is not the occupant of the mobile vehicle
✅ Answer: A
Explanation: First-party benefits are designed to cover eligible persons involved in the operation of a vehicle. Coverage does not extend to recreational vehicles or vehicles NOT intended for highway use. It describes a situation outside the intended scope of standard auto policy
Question 6
Kimberly is injured in an accident with an at-fault driver who had insufficient automobile liability limits to satisfy the judgment against the driver. In this situation, Kimberly is able to seek recovery under which of the following coverages under her Personal Auto Policy?
A. Medical Payments
B. Uninsured Motorists
C. Underinsured Motorists
D. Bodily injury Liability
✅ Answer: C
Explanation: When an at-fault driver has insurance, but not enough coverage to fully compensate the injured party, this is considered an underinsured motorist situation.
Question 7
Under the terms of a PAP (Personal Auto Policy), an insured involved in an accident is required to take all of the following actions EXCEPT:
A. Authorize the insurance company to obtain related medical records
B. Submit to a medical examination at the request of the insurance company
C. Cooperate in the investigation or defense of a claim
D. Institute suit against a negligent third party
✅ Answer: D
Explanation: Part of the conditions on an insurance policy include: Insureds have a duty to cooperate with the insurance company during the claims process, authorize access to relevant medical records, submit to medical examinations when requested, and cooperate fully in investigations or claim defense. The insured is NOT required to take legal action against a negligent 3rd party. Filing a lawsuit is optional and not a condition of the policy.
Question 8
Which of the following is covered under collision coverage?
A. Damage caused by a hailstorm
B. Damage caused when your car hits another vehicle
C. Theft of personal belongings from your vehicle
D. Flood damage
✅ Answer: B
Explanation: Collision coverage applies to damage caused by impact with another vehicle or object. Pays for loss to an insured vehicle due to a collision. “Upset or Overturn” (Collision with other cars, fences, guardrails, buildings)
Question 9
Which scenario is covered under uninsured motorist (UM) coverage?
A. Injury to the driver of a vehicle when involved in an accident with a driver with no insurance
B. Damage to driver's vehicle when involved in an accident with a driver with no insurance
C. Injury to the driver of a vehicle when you are driving with no insurance
D. Fire damage to your vehicle
✅ Answer: A
Explanation: UM coverage protects you when you are injured by a driver who does not carry insurance. UM is added to your own policy, and covers YOU against the person in the accident that was uninsured or a hit/run. UM pays sums for ONLY BI sustained by an insured as the result of an accident caused by the owner/operator of an uninsured motor vehicle. Must be included in most states when liability coverage is included in the policy. Minimum requirement is the same as the minimum liability requirement.
Question 10
Medical Payments (MedPay) under a Personal Auto Policy pays for:
A. Injuries to the other driver and their passengers in a covered accident
B. Damage to the insured vehicle from a collision
C. Injuries the insured sustains when is hit by a car while jogging on Sunday afternoon
D. Injuries to a pedestrian caused by the insured's vehicle
✅ Answer: C
Explanation: MedPay is a first party benefit for the insured with ANY involvement with a vehicle. Medical coverage on an auto policy is NOT liability. Therefore, it would NOT cover anybody that is NOT the insured (NOT the other driver, NOT pedestrians, not vehicle damage. It covers medical expenses for the insured and passengers regardless of fault. MedPay- Provides coverage while in the vehicle and/or ANY involvement with a vehicle. Covers the Insured, resident family members/relatives, and passengers of INSURED’s car.
Ready to see all 120+ questions with full explanations and video lessons? Unlock the complete on-demand P&C exam program today ▼
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