P&C Exam Q&A Practice: 5 More Questions With Step-by-Step Explanations

P&C Exam Q&A Practice — 5 More Questions With Step-by-Step Explanations

Round 2. If the first set of practice questions helped, here are 5 more covering different topics. Remember: the goal isn't to get them right. It's to understand why each answer is correct.

Question 1: Commercial Property — Coinsurance

A building has a replacement cost of $500,000. The policy has an 80% coinsurance clause. The insured carries $300,000 in coverage. A fire causes $100,000 in damage. How much will the insurer pay?

A) $60,000 B) $75,000 C) $100,000 D) $300,000

Answer: B

Explanation: The coinsurance formula is: (Amount Carried / Amount Required) x Loss = Payment. Amount Required = $500,000 x 80% = $400,000. Amount Carried = $300,000. So: ($300,000 / $400,000) x $100,000 = $75,000. The insured is underinsured, so they share in the loss. If they had carried the full $400,000, the insurer would have paid the full $100,000.

Question 2: Workers Compensation

Which of the following is NOT a goal of workers compensation laws?

A) Provide sure and timely compensation to injured workers B) Eliminate litigation between employer and employee for covered injuries C) Allow the employee to choose between workers comp benefits and a civil lawsuit D) Promote workplace safety

Answer: C

Explanation: Workers compensation is an exclusive remedy. The employee cannot choose between workers comp and a civil lawsuit for covered injuries — workers comp is the only option (C is NOT a goal, so it's the correct answer). The three goals of workers comp are: (A) sure and timely compensation, (B) eliminating litigation, and (D) promoting workplace safety. The exclusive remedy concept is fundamental: the employee gives up the right to sue in exchange for guaranteed benefits regardless of fault.

Question 3: Personal Auto — Medical Payments

An insured's 20-year-old son lives in his own apartment. While riding as a passenger in a friend's car, the son is injured in an accident. Will Medical Payments coverage under the father's PAP apply?

A) Yes, because medical payments follow the insured B) Yes, but only if the friend's car is uninsured C) No, because the son doesn't live in the father's household D) No, because the son was in someone else's car

Answer: A

Explanation: Medical payments coverage follows the insured and resident relatives. But "resident" is the key word. The son lives in his own apartment, so he's not a resident relative. Wait — actually, the correct answer depends on the definition of "resident relative." Since the son lives in his own apartment, he is NOT a resident relative, so coverage would NOT apply under the father's policy. The correct answer is C. Medical payments apply to the named insured, resident relatives, and passengers in the covered auto. Since the son is not a resident relative and was not in the father's vehicle, the father's PAP medical payments would not apply.

Question 4: Homeowners — Personal Liability

Under an HO-3 policy, which of the following situations would be covered under Coverage E — Personal Liability?

A) The insured's dog bites a visitor at the insured's home B) The insured intentionally pushes a guest, causing injury C) The insured's teenage son vandalizes a neighbor's property D) The insured's business client is injured at the insured's home office

Answer: A

Explanation: Coverage E provides personal liability coverage for bodily injury or property damage caused by the insured's activities, including the actions of insured persons and household pets. A dog bite at the insured's home is a classic covered claim (A is correct). Intentional acts are excluded (B is wrong). While the son's vandalism might be covered if he's a minor (some policies exclude intentional acts of insureds), the more clear-cut answer is A. Business activities are excluded under homeowners policies (D is wrong — a business client injured in a home office relates to business activities, which requires a separate business policy).

Question 5: CGL — Completed Operations

A contractor installs a cabinet in a customer's home. Two months later, the cabinet falls off the wall and injures the customer. Under the contractor's CGL policy, is this covered?

A) Yes, under products-completed operations coverage B) No, because the work was completed more than 30 days ago C) No, because property damage to the contractor's own work is excluded D) Yes, but only if the contractor was negligent

Answer: A

Explanation: CGL includes products-completed operations coverage, which covers bodily injury and property damage arising out of the insured's completed work. The cabinet installation was completed, and the injury arose from that completed work (A is correct). There's no 30-day time limit on completed operations coverage under a standard CGL (B is wrong). The damage to the cabinet itself (the contractor's own work) might be excluded, but the bodily injury to the customer is covered (C describes a different exclusion). CGL is not a negligence-based policy — it covers liability regardless of fault for covered occurrences (D is wrong).

The Bottom Line

Practice makes perfect. Work through these questions, understand the reasoning, and then find more. The more questions you answer before exam day, the more patterns you'll recognize and the faster you'll move through the real exam.

Need extra help to PASS your Property and Casualty exam? Get our on-demand program here: https://www.pandcpacademy.com/pass-your-exam-now