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Free DE Casualty Producer Practice Questions

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Sample Practice Questions

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

  1. 1A plumbing contractor finishes a repair at a customer's building. A week later, the defective repair causes water damage to the customer's property. Which CGL exposure is most directly involved?

    1. A. Premises and ongoing operations liability
    2. B. Products and completed operations liability
    3. C. Personal and advertising injury liability
    4. D. Employee dishonesty liability

    Answer: B

    Explanation: "property damage from defective work or operations completed or abandoned" The loss follows completion of the contractor's work; ongoing operations and the other liability categories describe different exposures.

    Reference: NAIC Glossary of Insurance Terms — Glossary, Completed Operations Liability

  2. 2During underwriting, a producer learns that an applicant deliberately inflates prior loss amounts to obtain insurance payments. Which hazard category best captures the applicant's dishonest character or intent?

    1. A. Physical hazard
    2. B. Morale hazard
    3. C. Moral hazard
    4. D. Pure risk

    Answer: C

    Explanation: "Moral Hazard - personality characteristics that increase probability of losses." Deliberate dishonesty is a character-related moral hazard. Morale hazard concerns negligent disregard, physical hazard concerns a condition, and pure risk is a risk type.

    Reference: NAIC Glossary of Insurance Terms — Glossary, Moral Hazard and Morale Hazard

  3. 3An insured needs to confirm the policy term, listed vehicles, and liability limits on a personal auto policy. Which policy section should the producer consult first?

    1. A. The declarations page
    2. B. The insuring agreement
    3. C. The exclusions section
    4. D. The conditions section

    Answer: A

    Explanation: "the policy term, coverage limits, and information about the insured." The declarations identify those policy particulars and covered vehicles; other sections explain the coverage grant, restrictions, or duties.

    Reference: NAIC Consumer Auto Insurance Guide — Consumer Auto, Declarations Page

  4. 4A Delaware resident negotiates casualty insurance for compensation but holds no producer license. Which rule applies?

    1. A. A license is required because negotiating insurance is a licensed producer activity
    2. B. No license is needed unless the person also collects premiums
    3. C. Only an insurer appointment is required
    4. D. A license is required only after the first policy is issued

    Answer: A

    Explanation: 18 Del. C. § 1703 states, "A person shall not transact insurance in this State for any class or classes of insurance unless the person is licensed as an insurance producer, adjuster or appraiser for that line of authority in accordance with this chapter." Negotiating casualty coverage therefore requires the producer license before the activity occurs.

    Reference: Delaware Code Title 18 — 18 Del. C. § 1703

  5. 5A Delaware producer receives premium money from an insured. In what capacity must the producer hold it?

    1. A. Fiduciary capacity
    2. B. As unrestricted operating revenue
    3. C. As a personal loan from the insured
    4. D. As insurer surplus

    Answer: A

    Explanation: Regulation 505 states, "All insurance producers shall hold premium funds in a fiduciary capacity." The funds are held in trust, not treated as unrestricted revenue.

    Reference: Reg 505 — 18 DE Admin. Code 505, § 5.0

  6. 6What minimum automobile liability limits satisfy Delaware's financial-responsibility law for one accident?

    1. A. $25,000 per person, $50,000 per accident for bodily injury, and $10,000 property damage
    2. B. $15,000 per person, $30,000 per accident, and $5,000 property damage
    3. C. $50,000 per person, $100,000 per accident, and $25,000 property damage
    4. D. A $100,000 combined single limit only

    Answer: A

    Explanation: Section 2902 prescribes "$25,000, because of bodily injury to or death of 1 person", $50,000 for two or more persons, and $10,000 for property damage in one accident.

    Reference: Delaware Code Online — 21 Del. C. § 2902(b)(2)

  7. 7What is the focus of a Delaware insurance market-conduct examination?

    1. A. Unfair or deceptive practices in the regulated person's insurance business
    2. B. An insurer's financial solvency and the adequacy of its loss reserves
    3. C. An applicant's knowledge on the producer licensing examination
    4. D. A claimant's medical condition in an independent medical examination

    Answer: A

    Explanation: Section 2306 empowers the Commissioner to examine insurance affairs "in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice." Market conduct therefore concerns insurance-business compliance.

    Reference: Delaware Code Online — 18 Del. C. § 2306

  8. 8A CGL claims-made policy runs from January through December and has a January 1 retroactive date. An injury occurs in March and the claim is first reported to the insurer in June of the same policy year. Which trigger analysis applies?

    1. A. The claims-made policy requires the injury during its term, regardless of reporting time.
    2. B. The claims-made policy can apply when the claim is reported during its term after the retroactive date.
    3. C. The claims-made policy requires reporting after expiration through an extended reporting period.
    4. D. The claims-made policy needs only an injury after the retroactive date, regardless of reporting time.

    Answer: B

    Explanation: "only cover claims reported within the effective dates of the policy that occur after a specified date" The March injury follows the retroactive date and the June report is within the term. Occurrence timing alone, a tail period, or retroactive timing alone does not state this claims-made trigger.

    Reference: NAIC Issue Paper No. 65 — Issue Paper No. 65, paragraphs 4–5

  9. 9A company leases a machine and must pay for damage under its lease. The machine is at a repair shop, and the company does not hold legal title. What gives the company insurable interest in it?

    1. A. Its contractual exposure to financial loss if the machine is damaged
    2. B. Its legal title to the machine recorded in the purchase agreement
    3. C. Its continuous physical custody of the machine during repairs
    4. D. Its payment of an insurance premium on the machine during the lease

    Answer: A

    Explanation: "the insured can suffer a financial loss from damage, loss or destruction to it." The lessee bears a contractual loss even without title or custody. Premium payment alone does not create the loss exposure.

    Reference: NAIC Glossary of Insurance Terms — Glossary, Insurable Interest

  10. 10A business auto policy broadly covers collision damage. A separate provision says damage while the vehicle is used in an organized speed contest is outside coverage. The insured crashes during such a contest. How should that provision affect the claim?

    1. A. It changes the deductible for an otherwise covered collision.
    2. B. It excludes this loss despite the broader collision coverage grant.
    3. C. It shifts the insurer's recovery rights after it pays the loss.
    4. D. It apportions payment with another insurer covering the loss.

    Answer: B

    Explanation: "exclusions, which are specific events and circumstances the policy will not cover." The stated speed-contest provision is a specific exclusion, so the collision grant does not cover this loss. It does not set a deductible, transfer recovery rights, or allocate payment between insurers.

    Reference: NAIC Consumer Auto Insurance Guide — Consumer Auto, Insuring Agreement

Topics in this practice bank

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

  • General knowledge — I. TYPES OF POLICIES, BONDS, AND RELATED TERMS
    • A. Commercial general liability
    • A. Commercial general liability / 1. Exposures
    • A. Commercial general liability / 1. Exposures / a. Premises and Operations
    • A. Commercial general liability / 1. Exposures / b. 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 / b. Coverage B: Personal Injury and Advertising Injury
    • A. Commercial general liability / 2. Coverage / c. Coverage C: Medical Payments
    • A. Commercial general liability / 2. Coverage / d. Supplemental Payments
    • A. Commercial general liability / 2. Coverage / e. Who is an insured
    • A. Commercial general liability / 2. Coverage / f. First named insured
    • A. Commercial general liability / 2. Coverage / g. Limits (Per occurrence, Annual Aggregate)
    • A. Commercial general liability / 2. Coverage / h. Damage to Property of Others
    • B. Automobile: personal auto and business auto
    • B. Automobile / 1. Liability
    • B. Automobile / 1. Liability / a. Bodily Injury
    • B. Automobile / 1. Liability / b. Property Damage
    • B. Automobile / 1. Liability / c. Split Limits
    • B. Automobile / 1. Liability / d. Combined Single Limit
    • B. Automobile / 2. Medical Payments
    • B. Automobile / 3. Physical Damage (collision; other than collision; specified perils)
    • B. Automobile / 4. Uninsured motorists
    • B. Automobile / 5. Underinsured motorists
    • B. Automobile / 6. Who is an insured
    • B. Automobile / 7. Types of Auto
    • B. Automobile / 7. Types of Auto / a. Owned
    • B. Automobile / 7. Types of Auto / b. Non-owned
    • B. Automobile / 7. Types of Auto / c. Hired
    • B. Automobile / 7. Types of Auto / d. Temporary Substitute
    • B. Automobile / 7. Types of Auto / e. Newly Acquired Autos
    • B. Automobile / 7. Types of Auto / f. Transportation Expense and Rental Reimbursement Expense
    • B. Automobile / 8. Auto Dealers Coverage Form, including Garagekeepers Insurance
    • B. Automobile / 9. Exclusions
    • B. Automobile / 10. Individual Named Insured and Drive Other Car (DOC)
    • B. Automobile / 11. Mobile equipment
    • C. Workers Compensation Insurance, Employers Liability Insurance, and Related Issues
    • C. Workers Compensation / 1. Standard policy concepts
    • C. Workers Compensation / 1. Standard policy concepts / a. Who is an employee/employer
    • C. Workers Compensation / 1. Standard policy concepts / b. Compensation
    • C. Workers Compensation / 2. Work-related vs. non-work-related
    • C. Workers Compensation / 3. Other states’ insurance
    • C. Workers Compensation / 4. Employers Liability
    • C. Workers Compensation / 5. Exclusive remedy
    • C. Workers Compensation / 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. Business Owners Policy (BOP)
  • General knowledge — II. INSURANCE TERMS AND RELATED CONCEPTS
    • 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 / a. General
    • R. Damages / 1. Compensatory / b. Special
    • R. Damages / 2. Punitive
    • S. Compliance with provisions of Fair Credit Reporting Act
  • General knowledge — III. POLICY PROVISIONS
    • 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)
  • State statutes, rules, and regulations — I. DELAWARE STATUTES, REGULATIONS, AND BULLETINS PERTINENT TO LIFE, ACCIDENT AND HEALTH, PROPERTY AND CASUALTY INSURANCE
    • A. License Regulations
    • A. License Regulations / 1. Persons required to be licensed and responsibilities
    • A. License Regulations / 1. Persons required to be licensed and responsibilities / a. Producer/Agent and Broker
    • A. License Regulations / 1. Persons required to be licensed and responsibilities / b. Surplus lines broker
    • A. License Regulations / 1. Persons required to be licensed and responsibilities / c. Limited Lines producer
    • A. License Regulations / 1. Persons required to be licensed and responsibilities / d. Producer/Consultant
    • A. License Regulations / 2. License requirements
    • A. License Regulations / 2. License requirements / a. Fees and application
    • A. License Regulations / 2. License requirements / b. Prerequisites
    • A. License Regulations / 2. License requirements / c. Special qualifications
    • A. License Regulations / 2. License requirements / d. Written examinations and exemptions
    • A. License Regulations / 2. License requirements / e. Exemptions from licensing
    • A. License Regulations / 2. License requirements / f. Insurer’s appointment
    • A. License Regulations / 3. Authority
    • A. License Regulations / 3. Authority / a. Definitions
    • A. License Regulations / 3. Authority / b. License requirements
    • A. License Regulations / 3. Authority / c. Lines of authority
    • A. License Regulations / 3. Authority / d. Termination of appointment
    • A. License Regulations / 4. Notice of address change
    • A. License Regulations / 5. Continuing education
    • B. Marketing Practices
    • B. Marketing Practices / 1. Duties of licensed personnel
    • B. Marketing Practices / 2. Record keeping
    • B. Marketing Practices / 3. Compensation of licensees
    • B. Marketing Practices / 4. Termination, suspension, fines
    • C. Insurance Commissioner
    • C. Insurance Commissioner / 1. Election and term
    • C. Insurance Commissioner / 2. General powers and duties
    • C. Insurance Commissioner / 3. Examination of insurers and producers
    • C. Insurance Commissioner / 4. Hearings
    • C. Insurance Commissioner / 5. Cease and desist orders and penalties
    • C. Insurance Commissioner / 6. General penalties
  • State statutes, rules, and regulations — II. DELAWARE STATUTES, RULES, REGULATIONS, AND BULLETINS COMMON TO BOTH PROPERTY AND CASUALTY INSURANCE
    • A. Surplus Lines Broker
    • A. Surplus Lines Broker / 1. Definitions
    • A. Surplus Lines Broker / 2. Conditions for procurement
    • A. Surplus Lines Broker / 3. Endorsement of policy
    • A. Surplus Lines Broker / 4. Liability of insurer
    • A. Surplus Lines Broker / 5. License suspension, revocation
    • A. Surplus Lines Broker / 6. Records and annual statement
    • A. Surplus Lines Broker / 7. Broker’s affidavit
    • B. Consent of rate filings
    • C. Fiduciary accounts
    • D. Guaranty Association Act
    • E. Premium financing
    • E. Premium financing / 1. Definitions
    • E. Premium financing / 2. Licensing
    • E. Premium financing / 3. Form of agreement
    • F. Credit Scoring for Underwriting
    • F. Credit Scoring for Underwriting / 1. Purpose
    • F. Credit Scoring for Underwriting / 2. Scope
    • F. Credit Scoring for Underwriting / 3. Applicability
    • F. Credit Scoring for Underwriting / 4. Written notice to consumers
    • F. Credit Scoring for Underwriting / 5. Prohibited practices
  • State statutes, rules, and regulations — III. DELAWARE STATUTES, RULES, REGULATIONS, AND BULLETINS PERTINENT TO CASUALTY INSURANCE ONLY
    • A. Delaware Motorist Protection Act
    • A. Delaware Motorist Protection Act / 1. Required coverage and limits
    • A. Delaware Motorist Protection Act / 2. Arbitration
    • A. Delaware Motorist Protection Act / 3. Insurance ID card
    • A. Delaware Motorist Protection Act / 4. Fines
    • A. Delaware Motorist Protection Act / 5. Form A
    • B. Uninsured and Underinsured Motorists Coverage
    • B. Uninsured and Underinsured Motorists Coverage / 1. Required coverage
    • B. Uninsured and Underinsured Motorists Coverage / 2. Option for additional coverage
    • C. Cancellation and nonrenewal of auto insurance
    • C. Cancellation and nonrenewal / 1. Reasons for
    • C. Cancellation and nonrenewal / 2. Notice
    • C. Cancellation and nonrenewal / 3. Hearing
    • C. Cancellation and nonrenewal / 4. Exclusion of designated person
    • C. Cancellation and nonrenewal / 5. Request for driving records
    • D. Delaware Automobile Insurance Plan
    • D. Delaware Automobile Insurance Plan / 1. Producer and insurer responsibilities
    • D. Delaware Automobile Insurance Plan / 2. Eligibility
    • D. Delaware Automobile Insurance Plan / 3. Coverage and options
    • D. Delaware Automobile Insurance Plan / 4. Designation of carrier
    • D. Delaware Automobile Insurance Plan / 5. Binding authority
    • D. Delaware Automobile Insurance Plan / 6. Collection of placement fee
    • E. Defensive driving course credit
    • F. Private passenger automobile insurance rating information
    • G. Workers Compensation
    • G. Workers Compensation / 1. Applicability
    • G. Workers Compensation / 2. Excluded employments
    • G. Workers Compensation / 3. Executive offices, sole proprietors, partners
    • G. Workers Compensation / 4. Requirement for insurance policy
    • G. Workers Compensation / 5. Minimum duration of incapacity
    • G. Workers Compensation / 6. Medical benefits required
    • G. Workers Compensation / 7. Compensation for total disability
    • G. Workers Compensation / 8. Compensation for partial disability
    • G. Workers Compensation / 9. Survivorship benefits
    • G. Workers Compensation / 10. Burial expenses
    • G. Workers Compensation / 11. Deductible options Form B
    • G. Workers Compensation / 12. Assigned Risk Plan
    • G. Workers Compensation / 13. Workplace safety
    • G. Workers Compensation / 14. Worker’s Compensation rating/classification
    • G. Workers Compensation / 15. Terrorism Risk Insurance Act
    • G. Workers Compensation / 16. Permanent Impairment and Disfigurement Settlements
  • State statutes, rules, and regulations — IV. INSURANCE ETHICS
    • A. Definitions
    • A. Definitions / 1. Market Conduct
    • A. Definitions / 2. Authority
    • A. Definitions / 2. Authority / a. Express
    • A. Definitions / 2. Authority / b. Implied
    • A. Definitions / 2. Authority / c. Apparent
    • A. Definitions / 3. Agency versus individual licensee
    • A. Definitions / 4. Suitability
    • A. Definitions / 5. Ethical behavior and good moral standards
    • B. Market Conduct examination
    • C. Binding coverage
    • D. Disclosure letters and forms
    • E. Errors and Omissions insurance
    • F. Unfair practices
    • F. Unfair practices / 1. Twisting
    • F. Unfair practices / 2. Churning
    • F. Unfair practices / 3. Commingling
    • F. Unfair practices / 4. Misrepresentation
    • F. Unfair practices / 5. Defamation
    • F. Unfair practices / 6. Coercion and intimidation
    • F. Unfair practices / 7. Unfair discrimination
    • F. Unfair practices / 8. Rebating
    • F. Unfair practices / 9. Unfair claims settlement practices
    • F. Unfair practices / 10. Coercion of debtors
    • F. Unfair practices / 11. Publicized Founded Complaints
    • G. Insurance fraud and Fraud Prevention Bureau
    • H. Advertisement procedures
    • I. Privacy
    • J. Conflict of issues and producer’s responsibilities

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