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Sample Practice Questions

Try these 10 sample questions from the Casualty practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A hardware store sells a ladder that breaks after the buyer takes it home, injuring the buyer. Which CGL exposure best describes the claim?

    1. A. Products and completed operations exposure
    2. B. Premises and operations exposure
    3. C. Personal and advertising injury exposure
    4. D. Medical payments exposure

    Answer: A

    Explanation: The NAIC describes product liability when a buyer "is hurt by a product you sell, you can be held responsible." The injury arose from a sold product after it left the store.

    Reference: NAIC, Small Business Insurance — Small business insurance, General liability

  2. 2A warehouse owner faces possible storm damage but cannot gain financially from the storm itself. How should this exposure be classified?

    1. A. Pure risk
    2. B. Speculative risk
    3. C. Investment risk
    4. D. Entrepreneurial risk

    Answer: A

    Explanation: The NAIC defines pure risk as the "possibility of loss or no loss but no possibility of gain." Storm damage has those outcomes, unlike a venture that might earn a gain.

    Reference: NAIC, Glossary of Insurance Terms — Pure Risk

  3. 3A claims adjuster needs to confirm a personal auto policy's term and liability limits before evaluating a claim. Where should the adjuster look first?

    1. A. Declarations page
    2. B. Insuring agreement
    3. C. Exclusions section
    4. D. Subrogation clause

    Answer: A

    Explanation: The NAIC says the declarations page provides "the policy term, coverage limits, and information about the insured." That is the place to verify these scheduled facts.

    Reference: NAIC, Auto Insurance — Understanding your policy, Declarations page

  4. 4Which Iowa official appoints the state’s insurance commissioner?

    1. A. The governor
    2. B. The attorney general
    3. C. The state treasurer
    4. D. The secretary of state

    Answer: A

    Explanation: Iowa Code §505.2 says, "The governor shall appoint subject to confirmation by the senate" a commissioner of insurance.

    Reference: Iowa Code 505 — Iowa Code §505.2

  5. 5An insurer cancels an Iowa policy’s automobile bodily injury and property damage liability coverage for a reason other than nonpayment. What additional notice must accompany the cancellation?

    1. A. Possible eligibility for the Iowa automobile insurance plan
    2. B. Eligibility for the Iowa FAIR property plan
    3. C. A workers’ compensation benefit schedule
    4. D. A guaranty-association liquidation notice

    Answer: A

    Explanation: Iowa Code §515D.11 requires notice of "the insured’s possible eligibility for automobile liability insurance through the Iowa automobile insurance plan" to accompany the cancellation or nonrenewal notice.

    Reference: Iowa Code 515 D — Iowa Code §515D.11

  6. 6A claims-made CGL policy runs in 2026 with a January 1, 2025 retroactive date. A covered injury occurred in 2025, and the claim is first reported in 2026. Which timing feature makes the 2026 policy potentially responsive?

    1. A. The claim was first reported in the policy period, and the event followed the retroactive date.
    2. B. The injury occurred before the policy period, regardless of the retroactive date.
    3. C. The injury was discovered after the retroactive date, regardless of when reported.
    4. D. The claim was settled in the policy period, regardless of when first reported.

    Answer: A

    Explanation: The NAIC describes losses "that are first reported during the policy period, provided the losscausing event occurred after the retroactive date". Both conditions are met.

    Reference: NAIC, A Regulator's Introduction to the Insurance Industry — Glossary, Claims-made policy

  7. 7Which situation illustrates a moral hazard rather than a morale or physical hazard?

    1. A. An applicant deliberately conceals a prior loss to obtain insurance.
    2. B. An insured stops taking care because insurance will pay for damage.
    3. C. A building has deteriorated wiring that increases fire risk.
    4. D. A walkway has a loose surface that increases fall risk.

    Answer: A

    Explanation: The NAIC links moral hazard to "dishonesty or character defects in an individual" and morale hazard to "carelessness or indifference to loss". Deliberate concealment is dishonest; the other scenarios are carelessness or physical conditions.

    Reference: NAIC, A Regulator's Introduction to the Insurance Industry — Glossary, Moral and Morale Hazard

  8. 8A policyholder asks where the insurer's initial promise to cover specified risks appears in the policy. Which provision contains that grant?

    1. A. Declarations page
    2. B. Insuring agreement
    3. C. Conditions section
    4. D. Exclusions section

    Answer: B

    Explanation: The NAIC says the insuring agreement is "a broad statement listing the perils and risks covered under the contract." It grants coverage before conditions and exclusions are applied.

    Reference: NAIC, Auto Insurance — Understanding your policy, Insuring agreement

  9. 9An appointee has just been confirmed as Iowa insurance commissioner. What is the statutory term of office?

    1. A. Two years
    2. B. Three years
    3. C. Four years
    4. D. Six years

    Answer: C

    Explanation: Section 505.2 states that the commissioner serves for "four years beginning and ending as provided by section 69.19."

    Reference: Iowa Code 505 — Iowa Code §505.2

  10. 10How must an Iowa named insured reject uninsured or underinsured motorist coverage?

    1. A. By a written rejection signed by the named insured
    2. B. By an unsigned notation made by the producer
    3. C. By an oral statement to the adjuster
    4. D. By allowing the first premium notice to expire

    Answer: A

    Explanation: Iowa Code §516A.1(2) permits rejection "by written rejections signed by the named insured."

    Reference: Iowa Code 516 a — Iowa Code §516A.1(2)

Topics in this practice bank

These topics describe the available practice for Casualty. Review the examination outline and its sources for scope and allocation details.

  • General knowledge — I. TYPES OF POLICIES, BONDS, AND RELATED TERMS (23 scored questions)
    • A. Commercial general liability
    • A. Commercial general liability / 1. Exposures
    • A. Commercial general liability / 1. Exposures / 1. Premises and Operations
    • A. Commercial general liability / 1. Exposures / 2. Products and Completed Operations
    • A. Commercial general liability / 2. Coverage
    • A. Commercial general liability / 2. Coverage / a. Coverage A: Bodily Injury and Property Damage Liability (Occurrence, Claims made including Retroactive Date)
    • A. Commercial general liability / 2. Coverage / 2. Coverage B: Personal Injury and Advertising Injury
    • A. Commercial general liability / 2. Coverage / 3. Coverage C: Medical Payments
    • A. Commercial general liability / 2. Coverage / 4. Supplemental Payments
    • A. Commercial general liability / 2. Coverage / 5. Who is an insured
    • A. Commercial general liability / 2. Coverage / 6. First named insured
    • A. Commercial general liability / 2. Coverage / 7. Limits (Per occurrence, Annual Aggregate)
    • A. Commercial general liability / 2. Coverage / 8. Damage to Property of Others
    • B. Automobile: personal auto and business auto
    • B. Automobile: personal auto and business auto / 1. Liability
    • B. Automobile: personal auto and business auto / 1. Liability / 1. Bodily Injury
    • B. Automobile: personal auto and business auto / 1. Liability / 2. Property Damage
    • B. Automobile: personal auto and business auto / 1. Liability / 3. Split Limits
    • B. Automobile: personal auto and business auto / 1. Liability / 4. Combined Single Limit
    • B. Automobile: personal auto and business auto / 2. Medical Payments
    • B. Automobile: personal auto and business auto / 3. Physical Damage (collision; other than collision; specified perils)
    • B. Automobile: personal auto and business auto / 4. Uninsured motorists
    • B. Automobile: personal auto and business auto / 5. Underinsured motorists
    • B. Automobile: personal auto and business auto / 6. Who is an insured
    • B. Automobile: personal auto and business auto / 7. Types of Auto
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 1. Owned
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 2. Non-owned
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 3. Hired
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 4. Temporary Substitute
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 5. Newly Acquired Autos
    • B. Automobile: personal auto and business auto / 7. Types of Auto / 6. Transportation Expense and Rental Reimbursement Expense
    • B. Automobile: personal auto and business auto / 8. Auto Dealers Coverage Form, including Garagekeepers Insurance
    • B. Automobile: personal auto and business auto / 9. Exclusions
    • B. Automobile: personal auto and business auto / 10. Individual Insured and Drive Other Car (DOC)
    • B. Automobile: personal auto and business auto / 11. Mobile equipment
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.)
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 1. Standard policy concepts
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 1. Standard policy concepts / 1. Who is an employee/employer
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 1. Standard policy concepts / 2. Compensation
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 2. Work-related vs. non-work-related
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 3. Other states’ insurance
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 4. Employers Liability
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 5. Exclusive remedy
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues (This section does not deal with specifics of state law, which are addressed elsewhere in this outline.) / 6. Premium Determination
    • D. Crime
    • D. Crime / 1. Employee Dishonesty
    • D. Crime / 2. Theft
    • D. Crime / 3. Robbery
    • D. Crime / 4. Burglary
    • D. Crime / 5. Forgery and Alteration
    • D. Crime / 6. Mysterious disappearance
    • E. Bonds
    • E. Bonds / 1. Surety
    • E. Bonds / 2. Fidelity
    • F. Professional liability
    • F. Professional liability / 1. Errors and Omissions
    • F. Professional liability / 2. Medical Malpractice
    • F. Professional liability / 3. Directors and Officers (D&O)
    • F. Professional liability / 4. Employment Practices Liability (EPLI)
    • F. Professional liability / 5. Cyber liability and data breach, funds transfer
    • F. Professional liability / 6. Liquor liability
    • G. Umbrella/Excess Liability
    • H. Businessowners Policy (BOP)
  • General knowledge — II. INSURANCE TERMS AND RELATED CONCEPTS (15 scored questions)
    • A. Risk
    • B. Hazards
    • B. Hazards / 1. Moral
    • B. Hazards / 2. Morale
    • B. Hazards / 3. Physical
    • C. Indemnity
    • D. Insurable interest
    • E. Loss valuation
    • E. Loss valuation / 1. Actual cash value
    • E. Loss valuation / 2. Replacement cost
    • E. Loss valuation / 3. Market value
    • E. Loss valuation / 4. Stated/agreed value
    • E. Loss valuation / 5. Salvage value
    • F. Negligence
    • G. Liability
    • H. Occurrence
    • I. Binders
    • J. Warranties
    • K. Representations
    • L. Concealment
    • M. Deposit Premium/Audit
    • N. Certificate of Insurance
    • O. Law of Large Numbers
    • P. Pure vs. Speculative Risk
    • Q. Endorsements
    • R. Damages
    • R. Damages / 1. Compensatory
    • R. Damages / 1. Compensatory / 1. General
    • R. Damages / 1. Compensatory / 2. Special
    • R. Damages / 2. Punitive
    • S. Compliance with provisions of Fair Credit Reporting Act
  • General knowledge — III. POLICY PROVISIONS (12 scored questions)
    • A. Declarations
    • B. Insuring agreement
    • C. Conditions
    • D. Exclusions and Limitations
    • E. Definition of the insured
    • F. Duties of the insured after a loss
    • G. Cancellation and nonrenewal provisions
    • H. Supplementary payments
    • I. Proof of loss
    • J. Notice of claim
    • K. Other insurance
    • L. Subrogation
    • M. Loss settlement provisions including consent to settle a loss
    • N. Terrorism Risk Insurance Act (TRIA)
  • Iowa specific — I. IOWA LAWS, RULES, AND REGULATIONS COMMON TO ALL LINES (25 scored questions)
    • A. Insurance Commissioner/Division
    • A. Insurance Commissioner/Division / 1. Broad powers and duties
    • A. Insurance Commissioner/Division / 2. Examination of records
    • A. Insurance Commissioner/Division / 3. Hearings
    • A. Insurance Commissioner/Division / 4. Penalties
    • A. Insurance Commissioner/Division / 5. Cease and desist
    • B. Licensing
    • B. Licensing / 1. Applications
    • B. Licensing / 2. Change of address
    • B. Licensing / 3. Licensing examinations
    • B. Licensing / 4. Resident/nonresident
    • B. Licensing / 5. Temporary license
    • B. Licensing / 6. Exemptions
    • B. Licensing / 7. Denial, renewal, termination of licenses
    • B. Licensing / 8. Commissions and referral fees
    • B. Licensing / 9. Company appointments
    • B. Licensing / 10. Continuing education
    • C. Unfair and Deceptive Practices
    • C. Unfair and Deceptive Practices / 1. Unfair discrimination
    • C. Unfair and Deceptive Practices / 2. Misrepresentation
    • C. Unfair and Deceptive Practices / 3. Rebating
    • C. Unfair and Deceptive Practices / 4. False information and advertising
    • C. Unfair and Deceptive Practices / 5. Claims settlement
    • C. Unfair and Deceptive Practices / 6. Defamation
    • C. Unfair and Deceptive Practices / 7. Boycott, coercion and intimidation
    • D. Iowa Insurance Fraud Act
    • E. Producer Responsibilities
    • E. Producer Responsibilities / 1. Prohibited Acts
    • E. Producer Responsibilities / 2. Use of credit information**
    • E. Producer Responsibilities / 2. Use of credit information** / a. Notification
    • E. Producer Responsibilities / 2. Use of credit information** / b. Adverse action
    • F. Guaranty Association
    • G. Definitions
    • G. Definitions / 1. Domestic, foreign, alien
    • G. Definitions / 3. Certificate of Authority
    • H. Surplus**
    • I. Insurance Notices and Documents - Electronic Delivery
  • Iowa specific — II. IOWA LAWS, RULES, AND REGULATIONS PERTINENT TO CASUALTY INSURANCE (8 scored questions)
    • A. Iowa Automobile Insurance Plan (Assigned Risk)
    • B. Private-passenger automobile insurance
    • B. Private-passenger automobile insurance / 1. Uninsured/Underinsured motorists coverage
    • B. Private-passenger automobile insurance / 1. Uninsured/Underinsured motorists coverage / 1. Rejection by the insured
    • B. Private-passenger automobile insurance / 2. Proof of financial responsibility
    • B. Private-passenger automobile insurance / 3. Cancellation and nonrenewal
    • C. Transportation Network Companies (ride-sharing services)
    • D. Workers’ Compensation
    • D. Workers’ Compensation / 1. Definitions
    • D. Workers’ Compensation / 2. Covered employment
    • D. Workers’ Compensation / 3. Benefits provided
    • D. Workers’ Compensation / 4. Covered injuries
    • D. Workers’ Compensation / 5. Occupational disease
    • E. Rate standards

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These are independent study questions, not actual examination items. For examination requirements and official information, view Casualty details.