Property And Casualty Insurance License Cheat Sheet 2026

The 30 highest-yield Property And Casualty Insurance License facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Under a personal auto policy, which coverage pays for damage to the insured's own vehicle caused by a collision? → Collision
2. What does 'subrogation waiver' mean? → The insurer agrees not to pursue recovery from a negligent third party
3. Which commercial coverage is specifically designed to cover losses caused by an employee stealing money or property from the employer? → Commercial Crime Coverage / Employee Dishonesty Bond
4. What is the 'appraisal clause' in a property policy used for? → Resolving disputes over the amount of loss when coverage is not in question
5. Under a business owners policy (BOP), which type of business would typically NOT qualify for coverage? → A large manufacturing plant with hundreds of employees
6. What is an 'ISO Commercial Lines Manual' (CLM) used for? → Providing standardized rules, forms, and rating instructions for commercial insurance
7. The 'retroactive date' on a claims-made CGL policy: → Sets the earliest date from which occurrences will be covered under the claims-made form
8. Employers Liability coverage (Part 2 of workers' compensation) protects the employer against: → Employee lawsuits alleging negligence beyond standard workers' comp benefits
9. What is a 'named peril' policy? → A policy that covers only the perils specifically listed
10. Which of the following best describes 'subrogation' in property insurance? → The insurer's right to recover from a negligent third party after paying a claim
11. What is 'book of business' in insurance underwriting? → The total portfolio of policies written by an insurer or agent
12. Replacement cost coverage for personal property pays: → The cost to replace the item with a new item of like kind and quality
13. What does a Commercial General Liability (CGL) policy primarily cover? → Third-party bodily injury and property damage claims arising from business operations
14. A CGL policy's 'medical payments' coverage differs from bodily injury liability coverage primarily because: → Medical payments coverage pays regardless of fault and does not require a lawsuit
15. A 'scheduled personal property endorsement' is used to: → Provide higher limits and broader coverage for specific high-value items
16. Under a business auto policy (BAP), 'Symbol 1' means: → Any auto is covered
17. Which organization accredits state insurance departments and promotes uniformity in insurance regulation? → National Association of Insurance Commissioners (NAIC)
18. What is the purpose of coinsurance in a property insurance policy? → To ensure the insured carries adequate coverage relative to property value
19. What is 'actual cash value' (ACV) in property insurance? → Replacement cost minus depreciation
20. What is 'waiver' in the context of insurance? → The voluntary relinquishment of a known right by either party
21. What does 'pro-rata cancellation' mean? → The unearned premium is returned based on the exact portion of the policy period remaining
22. What does a standard homeowners insurance policy (HO-3) cover regarding the dwelling? → Open perils (all-risk)
23. Under a standard homeowners policy, Coverage E (Personal Liability) covers: → Legal liability for bodily injury or property damage caused to others by the insured
24. Under a Dwelling Policy (DP-1), coverage is provided on which basis? → Named perils
25. What is 'churning' in insurance? → An agent convincing a client to repeatedly replace policies to generate commissions
26. What is the insured's 'duty to cooperate' after a loss? → The insured must assist the insurer in investigating, settling, and defending a claim
27. What is a 'first-party' claim? → A claim filed by the policyholder against their own insurance policy
28. What is an 'admitted' (authorized) insurer? → An insurer that has received a license from the state to sell insurance within that state
29. Which commercial package policy (CPP) component provides coverage for physical damage to a business's own building and contents? → Commercial Property Coverage
30. Which section of a homeowners policy covers the insured's personal property worldwide? → Coverage C