P&C Exam Q&A: 5 Claims Process Questions You Do Not Want to Miss

Claims questions are quietly some of the highest-value points on the P&C exam: the rules are short, few candidates study them on purpose, and the answers repeat year after year. Five in exam format, explained.

Question 1

Following a loss, the insured submits a signed, sworn statement itemizing the damages, supporting documents attached, within a set time. This document is the (A) Notice of loss (B) Proof of loss (C) Reservation of rights (D) Appraisal award

Answer: B. The proof of loss is the formal sworn statement of the amount claimed. A common conditional payment requirement, typically due within 60 days of request under many forms.

Question 2

The insurer and insured disagree on the amount of a loss - not on coverage. The policy's appraisal provision means (A) the insurer's estimate controls (B) each party picks an appraiser, and the two select an umpire; a written agreement of any two sets the loss amount (C) a court decides (D) the adjuster decides

Answer: B. Appraisal resolves amount disputes only. Each side appoints a competent appraiser, they choose an umpire, and an agreement between any two of the three determines the loss amount. Appraisal can never decide whether a loss is covered.

Question 3

An adjuster is best described as (A) an employee of the insured (B) a representative of the insurer who settles claims on its behalf (C) a neutral public official (D) a broker for new coverage

Answer: B. Company adjusters represent the insurer; independent adjusters handle claims for many insurers as contractors, but they still settle on behalf of the insurer. The public adjuster is the exception - hired by and working for the insured. Watch for that three-way distinction in one question.

Question 4

"Your insurer may repair or replace damaged property instead of paying cash." In the claims process this is an example of the (A) replacement cost option (B) right to repair or replace (C) abandonment clause (D) reinsurance option

Answer: B. Insurers commonly retain the option to repair, rebuild, or replace instead of a cash settlement. Abandonment, by contrast, is what the insured cannot do: leaving property to the insurer and demanding full payment is not accepted without the insurer's written consent.

Question 5

The insured abandons fire-damaged property and demands the full limit. Under standard policy provisions, the insurer must (A) pay and take the property (B) reject abandonment unless it agrees in writing (C) increase the deductible (D) deny the whole claim

Answer: B. There is no right to abandon property. Another repeat-tested claims rule: protecting property from further damage is required after a loss, and the insurer pays those reasonable expenses, but abandoning salvage is not a policy right unless the insurer consents in writing.

These facts reflect standard exam content; state rules and actual policies vary.

Claims rules are free points - go collect them

Short rules, predictable questions, easy points. Get the full claims drill plus every other exam section at pandcpacademy.com/pass-your-exam-now