Property Casualty Exam Questions & Answers 2026 (21–30)

Question 1

A tenant who negligently causes a fire that damages the landlord's rented building may be protected by:

TheoryPractice · Accepted Answer

Fire legal (damage to premises rented) liability. Damage to premises rented to you (fire legal liability) covers the tenant's liability for fire damage to a building they rent, an exposure not covered by their personal property coverage.

Question 2

Ordinance or law coverage is purchased to address the gap created when:

TheoryPractice · Accepted Answer

Building codes require costlier reconstruction than the original structure. Standard property forms exclude the increased cost of complying with updated building codes. Ordinance or law coverage funds the added expense of demolition and code-compliant rebuilding.

Question 3

Standard homeowners and commercial property policies generally treat damage caused by flood as:

TheoryPractice · Accepted Answer

An excluded peril requiring separate coverage. Flood is excluded under standard property forms; coverage is obtained separately, typically through the National Flood Insurance Program or a private flood policy.

Question 4

Coverage for earth movement such as an earthquake under a standard property policy is usually:

TheoryPractice · Accepted Answer

Excluded but available by endorsement or separate policy. Earth movement, including earthquakes, is excluded by standard forms. It can be added back through an endorsement or purchased as a separate earthquake policy.

Question 5

Inland marine floater coverage is most appropriate for:

TheoryPractice · Accepted Answer

Movable or mobile property such as jewelry, tools, or fine art. Inland marine forms cover property that moves or is portable, or that is hard to value under standard property forms, such as fine art, contractors' equipment, and personal valuables.

Question 6

Builders risk insurance covers:

TheoryPractice · Accepted Answer

A structure during the course of construction. Builders risk covers buildings or structures while under construction, including materials and supplies intended to become part of the structure, until the project is completed or occupied.

Question 7

A single property limit that applies across several buildings or locations, rather than a separate limit for each, is called:

TheoryPractice · Accepted Answer

Blanket insurance. Blanket insurance applies one limit to multiple items or locations, giving flexibility because the full limit is available wherever the loss occurs. Specific insurance assigns a separate limit to each item.

Question 8

Under a pair and set clause, if one item of a matched pair is lost, the insurer may:

TheoryPractice · Accepted Answer

Pay the difference between the value of the set before and after the loss. The pair and set clause lets the insurer pay the reduction in value of the set caused by losing one part, rather than the full set value, and may require surrender of the remaining items.

Question 9

A protective safeguards endorsement on a commercial property policy generally requires the insured to:

TheoryPractice · Accepted Answer

Maintain agreed protective systems such as sprinklers or alarms. The protective safeguards endorsement makes coverage contingent on the insured maintaining specified protective systems (sprinklers, alarms, guards). Failure to maintain them can suspend coverage.

Question 10

Under a property insurance condition prohibiting abandonment, the insured may not:

TheoryPractice · Accepted Answer

Leave damaged property to the insurer and demand full payment. The no-abandonment condition prevents the insured from abandoning damaged property to the insurer and demanding the full amount; the insurer is not required to take title to damaged goods.

Property Casualty Exam Questions & Answers 2026 (21–30)

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