Property and Casualty Insurance Exam Cheat Sheet: Must-Know Insider Tips! (2026 Update)
- pandcpacademy
- Feb 12
- 10 min read
Updated: 7 days ago
Preparing for the Property & Casualty insurance licensing exam? Most exams include around 150 questions covering core concepts: Policy structure, coverage types, state laws, ethics, & insurance terminology.
This cheat sheet highlights the most commonly tested material so you know what to focus on first — but passing the exam requires more than memorizing definitions — you'll be tested on how well you can apply these concepts.
Use this Cheat Sheet as your starting point. Then follow a structured study plan with over 12 hours of instructor led lessons, a practice exam, and more study tools for you PASS!
✔ Full understanding of all P&C chapters - You'll gain knowledge to think like the test writers
✔ Understand how questions are asked — not just what they mean
✔ Practice with exam-style questions and full detailed written and video explanations so you’re fully prepared
🚨 Ready to turn this outline into a pass-first-time strategy?
On the Property and Casualty Insurance Exam, you'll be tested on:
Dwelling - DP
Homeowners- HO
Auto - PAP and Commercial Auto
BOP- Business Owners Policy
CPP - Commercial Package Policy and Commercial General Liability
Workers Compensation
And Other Coverages and Benefits
Best Combination to Pass the Exam
When you’re ready to take your insurance exam, you’ll schedule it through authorized providers such as Pearson VUE, PSI, or Prometric, depending on your state’s requirements. In some states, you may also be required to complete a pre-licensing course before sitting for the exam. Even if your state doesn’t require it, completing a pre-licensing course is highly recommended in ALL states to give you the strongest foundation for success. At P&CP, we've partnered with Cerifi to offer you you a discounted Pre-Licensing Course at 30% off! This course is designed to work hand-in-hand with P&CP's On-Demand exam prep program for the most effective learning experience.
⭐ ⭐⭐⭐⭐“I passed my exam on the first try — Thanks to Denise and P&CP! Her course made ALL the difference!"
How Many Questions Are on the P&C Exam and What’s the Format?
The Property & Casualty (P&C) insurance exam typically includes 100 to 150 multiple-choice questions, depending on your state. You’ll usually have 2 to 2.5 hours to complete the exam.
The exam tests a combination of general (national) insurance concepts and state-specific regulations, so it’s essential to study both and understand the differences.
For example, in the Auto Section:
The general section may say the split liability limits are: 20/40/15
But the Texas split liability limits are: 30/60/25
💡 Exam Tip: Pay close attention to the exam wording—Take a second to double-check whether the question is asking about your State’s Law or general national information before selecting an answer!
You can expect a combination of questions structured in different formats:
Scenario-based questions
Straight-forward definitions and terminology
Policy structure
Ethics, licensing rules, and Commissioner related questions
The good news is that every question is multiple choice! Many times you can increase your chances of choosing the correct answer simply with common sense! Always read through each answer choice and determine what you KNOW to be true. You many be able to narrow down your choices from 4 to 2 even if you aren't 100% sure on the answer!
Core Topics Covered on the Property and Casualty Exam
In addition to the individual policy types we mentioned earlier (DP, HO, CPP, etc..) You will also need to master the following concepts:
Insurance Basics: Risk, indemnity, insurable interest
Policy Structure: Declarations, insuring agreements, conditions, exclusions
Underwriting & Claims: Roles of agents, adjusters, binders
State Regulations: Licensing rules, CE, disciplinary actions
Ethics: Consumer protection, fraud, fiduciary duty
🎯 How Most People Use This Guide (And Why They Get Stuck)
Reading summaries is helpful — but the licensing exam tests application, not definitions.
That’s why many candidates study for weeks and still feel unprepared when they sit for the exam. If you prefer to actually understand what you are reading through guided instruction, real exam-style practice, and explanations of why answers are correct-This On-Demand Program is for you.
State-Specific Laws You MUST Know for the Exam!
Each state includes a portion of the exam on state insurance law, which can include:
Insurance roles and powers
State licensing procedures
Required coverages vs elective coverages (e.g., PIP, UM/UIM)
State-specific CE requirements, commissioner roles
You will likely be tested on Time Limits for:
Claim Reporting / Filing
Workers Compensation benefits waiting periods
General: 3-day waiting period for benefits to begin
State-specific: Check your STATE Specific Waiting Period for Workers Compensation!
Commercial Lines Mini-Tail and Midi-Tail occurrences
Mini-tail: Losses must be reported within 60 days
Midi-tail: Losses must be reported within 5 years of policy termination
Full-tail: Extends the time-period claims can reported to the insurer indefinitely
💡 Memory Hint |
Mini-Mouse is 60! Or I could eat 60 Mini donuts!
Midi sounds like middle → 5 is in the middle of 1–10
Full circle keeps going - indefinitely
Loss Sustained = 1 year to report (loss occurred during policy period)
💡Memory Hint | LOSS - Happens (1) ONE time
Loss Sustained = 1 yr
Loss Assessment Coverage = $1,000
Discovery Form = 60 days to report (Loss discovered during or shortly after policy ends)
💡 Memory Hint | I recommend you 'group' this in your head with the mini tail & tell yourself you can watch Mini-Mouse and the discovery channel on channel 60!
Duties of the insured – Provide proof of loss within 60 days
Earthquake endorsements: 72 hours (Personal- HO Policy) & 168 hours (Commercial Policy)
Indemnification after loss – Insurers must pay verified claims within 60 days
Examination of Books and Records: 3 years: CPP & BOP- Insurers may examine & audit the insureds books/records during the policy period & up to 3 years after
Policy Cancellations
Mid-term cancellations
Personal Lines: 30 days
Commercial Lines: 60 days
Non-payment of premium cancellations
General: 10 days
State-specific example: Check your STATE Specific Non-payment of premium cancellation
Homeowner policy cancellations – 45 days
Policy anniversary cancellations with notice – 31 days
Early policy cancellation within first 60 days – Any reason
Flood coverage waiting period after application – 30 days
License & Regulatory Requirements
Temporary license validity: 90-180 Days - You will be tested on your STATE Specific!
MUST KNOW for your STATE!
Resident license requirement after moving – Could be anywhere from immediately to 30–90 days or a few States may allow longer
This is also State specific, you MUST KNOW for your STATE! You will be tested on your STATE Specific!
Producer license renewal – STATE Specific! Must Know for your State! Most States are every 2 years, but this varies! Must check your State specifics!
Legal action against insurer – 2 years
Applying for license after passing exam – STATE Specific! Most States have up to 1 year to apply for your P&C license, but it could vary by State! Must know your State specifics!
Responding to Department Inquiries | Producer notifications – Change of address, felony reporting, email change! Must know for your State Law!
Policy / Endorsement Specific Timeframes
Percentage Deductibles – Windstorm, Hail, Earthquake - Deductibles are typically a set number, the Windstorm, Hail, Earthquake Endorsements are all Percentage Deductibles!
Loss of income coverage for a BOP and CPP – Covers loss of earnings when a business is shut down for up to 1 year
HO policy coverage after death – Could remain in effect for 180 days, STATE Specific! Must Know timeframe for your State!
Binders maximum duration – STATE Specific! Must Know for your State! Could be 20 days or 30 days, you will be tested on your State specific laws!
Commissioner approval/disapproval of forms – STATE-SPECIFIC- Must Know timeframe for your State! Could be 30 days, but check your State Law!
Renewal premium increase notice – STATE-SPECIFIC- Must Know timeframe for your State! Could be 30 days, but check your State Law!
Department / Regulatory Action Deadlines
Timeframe for notice of a hearing – STATE-SPECIFIC! Must Know for your State! This could be a set # of days or could just be “Reasonable notice” You will be tested on your State specific law
IE: The Commissioner suspects a producer of engaging in prohibited acts. How much advance notice must be given before a hearing is held?
Producer violation correction – STATE-SPECIFIC. Could be a set number of days or could just be a deadline set by statute or administrative rule. Must know for your State!
IE: A Producer fails to respond to the Department within the required time period. How long does the producer have to correct the violation to avoid further disciplinary action?
Department notification after producer termination – 30 days
Some States add extra steps (IE: Must need Written explanation, copy to producer, etc.)
Commissioner’s Examinations: Insurer Solvency| NAIC Standard: Commissions must examine the Insurer's records at least once every 5 years. Commissioners may examine insurers more frequently if necessary!
Essential Knowledge & Smart Prep Tactics – Property and Casualty Insurance Exam Cheat Sheet
Key Insurance Terms You MUST Memorize
To pass the Property and Casualty Insurance Exam, you must know essential insurance terms inside and out. These are repeatedly tested and form the basis of many question scenarios.
Here are must-know definitions:
Premium – The amount the insured pays monthly to the insurer for coverage to remain active.
Deductible – The portion due from the Insured in the event of an accident before the Insurer will pay on a claim.
Indemnity – The principle of restoring the insured to the same Financial Condition they were in prior to suffering the Loss.
Risk – The uncertainty of future loss.
Hazard – Anything that increases the likelihood of a loss.
Loss Ratio – An insurer's loss ratio is one way to determine the insurer's profitability and is determined by dividing current losses by current earned premiums.
Insurable Interest – Concept that insurance can only be purchased when the applicant has a potential for financial loss.
Top Coverage Types You Must Know
Every state exam tests you on coverage types — their purpose, scope, exclusions, and endorsements.
Here's a breakdown:
Homeowners Insurance (HO1 through HO-8)
HO1- Basic
HO2-Broad
HO3-Special
HO4- Renters / Tenants
HO5-Comprehensive Form
HO6- Condos
HO8- Modified Coverage Form
Auto Insurance (PAP)
Includes liability, uninsured motorist (UM/UIM), medical payments (MedPay), and physical damage: Collision + Comprehensive (Other than Collision) .
Must know your State specifics for Auto: Must know your State limits, IE: Spilt and/or single limits (IE: 100/300/100).
Commercial General Liability (CGL)
Protects businesses against 3-party bodily injury and property damage. Know the difference between occurrence vs. claims-made policies and key terms like trigger, Retroactive Date, and types of tails.
Business Owner’s Policy (BOP)
Types of businesses eligible for small businesses. Know terms like business income and extra expense.
Policy Structure: Master the Layout (DICE)
Most policies follow a structure that includes:
Declarations Page – (Who/What/When/Where/How Much)
Insuring Agreement – Insurer’s Promises | The heart of the policy, Lists the covered perils and the insurer's responsibilities.
Conditions – Rights and Obligations of the Inured. Rules of the Road.
Exclusions – What’s specifically NOT covered, What’s “Omitted” from coverage, any reductions in coverage
Must Common Insurance Acronyms
PAP – Personal Auto Policy
DP: Dwelling Policy
HO – Homeowners Policy
BOP – Business Owners Policy
CGL – Commercial General Liability
ACV – Actual Cash Value
RCV – Replacement Cost Value
UM/UIM – Uninsured/Underinsured Motorist
FAIR – Fair Access to Insurance Requirements
NAIC – National Association of Insurance Commissioners
How to Memorize Legal Terms Faster
Legal definitions can feel dry and overwhelming. Use these tactics:
Use mnemonics: IE: “DICE” for Declarations, Insuring Agreement, Conditions, Exclusions.
Break them into parts: Don’t memorize one paragraph—split it into chunks. Denise at P&CP swears by this concept you will find her teaching breaks everything down into sections and easy to understand groupings.
Use analogies: Subrogation = “They pay, then get reimbursed.”
Explain aloud: Teach someone else. It reinforces retention. They say if you can explain it to a 6 year old, you get it!
🎯 Example: “Insurable Interest” = Having financial stake in a property being insured. IE: A home, if there's a loss to your home, you lose financially. Having insurable interest is necessary at the time of application and at the time of loss.
Conclusion: Your Shortcut to Passing the P&C Exam in 2026
The Property & Casualty insurance exam may feel overwhelming, but with the right strategy, you can pass with confidence.
With this cheat sheet, you’ve already unlocked:
A high-level overview of every major concept
The most-tested terms and policy structures
Smart memory hacks and study routines
Time-saving exam tactics and stress management tips
Ready to Turn This Into a Study Plan?
Use this cheat sheet as your overview — then follow a structured path so you know what to study, how to study it, and how questions are tested.
✔ 12+ hours of guided lessons
✔ Practice exams with explanations
✔ Study strategies focused on passing — not memorizing
Explore the On-Demand Program and see exactly how candidates prepare with confidence.
💡 The students who actually pass take structured guidance, real practice questions, and learn from these expert video lessons.
FAQ: Property and Casualty Insurance Exam Cheat Sheet
Q1. What’s the best way to use a P&C exam cheat sheet? Use the cheat sheet alongside of a course like, P&CP's On-Demand Courses. Focus on high-yield topics daily, and combine them with practice exams to reinforce concepts through repetition.
Q2. Can I pass the P&C exam just using a cheat sheet? We've complied a lot of information here for you and this cheat sheet is a helpful summary tool, but it's not a full prep solution. It should be used with a complete course!
Q3. Does the cheat sheet include state-specific laws? The cheat sheet focuses on national-level content. You should download your state’s exam content outline to ensure you’re studying all mandatory local laws.
Q4. What’s the fastest way to memorize all of this information? Break everything categories, use acronyms, real-world examples, and little 'silly' ways that will help the information stick in your mind! The little silly tricks are especially helpful for numbers, dividing them into logical groups or coming up with things like, "the discovery channel and mini-mouse on channel 60" are what can really make the information stick!
Q5. How long should I study before taking the P&C exam? Study for at least 3–4 weeks. Break sessions into daily blocks and use a structured plan with practice questions and cheat sheets.
Best Study Materials to Use Alongside This Cheat Sheet
To make the most of this cheat sheet, pair it with P&CP's On-Demand Course!
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