top of page
Search

Property & Casualty Practice Exam Q&A: Occurrence vs. Claims-Made Policies — What's the Difference?

One of the most tested topics on the P&C licensing exam is the difference between Occurrence and Claims-Made policies. Let's break it down simply so you can nail this on test day.


OCCURRENCE POLICY


An occurrence policy covers claims for incidents that happen during the policy period — regardless of when the claim is actually filed. Even if you cancel the policy years later, the insurance company is still responsible for anything that happened while the policy was active.


Example: A contractor has an occurrence policy active in 2022.

A client files a claim in 2025 for property damage that happened in 2022.

The 2022 policy covers it — even though it is no longer active.


CLAIMS-MADE POLICY

A claims-made policy only covers claims that are both made AND reported during the active policy period. If the policy lapses and a claim comes in after — even for something that happened during coverage — it may not be covered unless you have a tail (Extended Reporting Period).


Example: A consultant has a claims-made policy from 2022 to 2024.

A client files a claim in 2025 for work done in 2023.

Without a tail endorsement, this claim may NOT be covered.



Pass your property and casualty insurance exam with P&CP

EXAM TIP

When you see a question about when coverage applies, ask yourself:

  • Does it matter WHEN the event happened? That's Occurrence.

  • Does it matter WHEN the claim was filed? That's Claims-Made.



Property and Casualty Practice Exam

An architect had a professional liability (claims-made) policy from Jan 2020 to Jan 2023.


In March 2023, a former client files a complaint about work done in 2021. Is the claim covered?


Answer: NOT automatically covered. The claim was filed after the policy expired. The architect would need an Extended Reporting Period (tail) endorsement to be protected.


Want more exam preparation like this? Get P&CP's On- Demand Program with over 12 hours of video lessons a full 120 Property and Casualty Practice Exam, a fully comprehensive study guide and more exam tools that proven to help you pass your P&C exam!



Follow P&CP Academy for daily tips, practice questions, and study guides built specifically for insurance licensing candidates.

Comments

bottom of page