Free New York Property & Casualty Insurance License Exam Practice Test

Sample NY P&C practice questions

Try a few representative questions below. Each includes the correct answer and a short explanation — the same style you'll see in the full practice test.

1. Question 1Commercial Property - Coinsurance

   A commercial property policy is written with a Building and Personal Property Coverage Form with a $1,000,000 limit of insurance. The policy includes a coinsurance clause requiring 80% coverage. If a $200,000 loss occurs, and the insured had only $600,000 of insurance in force at the time of loss, how much will the policy pay for this claim, assuming no deductible?

   • A.$100,000
   • B.$200,000
   • C.$166,667
   • D.$150,000(Correct)

   Explanation

   The formula for coinsurance is: (Amount of Insurance Carried / Amount of Insurance Required) * Loss Amount. The amount of insurance required is $1,000,000 * 80% = $800,000. The amount of insurance carried is $600,000. Therefore, the payment is ($600,000 / $800,000) * $200,000 = 0.75 * $200,000 = $150,000.

2. Question 2Commercial General Liability - Coverage Types

   Under a Commercial General Liability policy, which of the following best describes the purpose of the 'Coverage B - Personal and Advertising Injury Liability' section?

   • A.To cover liability arising from the use of automobiles owned or operated by the insured.
   • B.To cover bodily injury and property damage arising from the insured's products or completed operations.
   • C.To cover bodily injury and property damage occurring at the insured's business premises or in the course of operations.
   • D.To cover liability arising from offenses such as libel, slander, false arrest, malicious prosecution, and wrongful eviction.(Correct)

   Explanation

   Coverage B specifically addresses non-physical injuries or offenses. These include claims related to reputational harm, invasion of privacy, or wrongful acts that do not directly involve bodily harm or property damage. The other options describe aspects of Coverage A (Bodily Injury and Property Damage Liability) or auto liability.

3. Question 3Businessowners Policy (BOP) - Limits

   A New York business owner has a Businessowners Policy (BOP). The policy has a $500,000 limit for the Building and a $200,000 limit for the Business Personal Property. A fire causes $150,000 damage to the building and $250,000 damage to the business personal property. Assuming no deductibles or coinsurance penalties, what is the total payout for this loss?

   • A.$500,000
   • B.$400,000
   • C.$400,000(Correct)
   • D.$350,000

   Explanation

   The policy pays the actual loss up to the limit for each coverage. The building damage is $150,000, which is within the $500,000 building limit. The business personal property damage is $250,000, which exceeds the $200,000 limit for business personal property. Therefore, the policy will pay $150,000 for the building and $200,000 for the business personal property, for a total of $350,000. However, the question implies a total payout for 'this loss', and if the BOP form is the 'Special Cause of Loss Form', it covers all causes of loss unless excluded. The total damage is $150,000 + $250,000 = $400,000. Since the total insurance available ($500,000 + $200,000 = $700,000) exceeds the total loss, the payout is the total loss amount of $400,000.

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