Delaware Property & Casualty Insurance Practice Exam Free - 2026

• A. $10,000 per person / $20,000 per accident; expenses within 1 year
• B. $25,000 per person / $50,000 per accident; expenses within 3 years
• C. $15,000 per person / $30,000 per accident; expenses incurred within 2 years of the accident
• D. $5,000 per person; expenses within 6 months

Correct answer: C. $15,000 per person / $30,000 per accident; expenses incurred within 2 years of the accident

Explanation: Section 2118(a)(2) requires compensation for reasonable and necessary medical, hospital, funeral (funeral capped at $5,000), lost-earnings and substitute-service expenses incurred within 2 years from the date of the accident, with minimum limits of $15,000 for any one person and $30,000 for all persons injured in one accident. The $25,000/$50,000 figures are the bodily injury liability minimums; $10,000 is the minimum property damage liability limit; $5,000 is the funeral cap, not the PIP limit. See 21 Del. C. § 2118.

• A. Coverage up to $100,000 per person and $300,000 per accident (or $300,000 single limit), not exceeding her bodily injury liability limits, and including underinsured coverage
• B. Coverage equal to twice her liability limits
• C. Coverage up to $50,000 per person and $100,000 per accident only
• D. No additional coverage; only the minimum limits may be sold

Correct answer: A. Coverage up to $100,000 per person and $300,000 per accident (or $300,000 single limit), not exceeding her bodily injury liability limits, and including underinsured coverage

Explanation: Section 3902(b) requires every insurer to offer the option to purchase additional coverage for personal injury or death up to $100,000 per person and $300,000 per accident, or $300,000 single limit, but not exceeding the bodily injury liability limits of the basic policy; acceptance amends the coverage to include underinsured motorist protection. Twice the liability limits and $50,000/$100,000 are not the statutory offer, and D contradicts the mandatory offer. See 18 Del. C. § 3902.

• A. By oral rejection to the producer; $500 deductible
• B. It cannot be omitted; $100 deductible
• C. By rejection on the insurer's premium quote; no deductible
• D. By written rejection on a form furnished by the insurer describing the coverage; $250 deductible unless the parties agree in writing to a different amount

Correct answer: D. By written rejection on a form furnished by the insurer describing the coverage; $250 deductible unless the parties agree in writing to a different amount

Explanation: Section 3902(a)(1) provides that uninsured vehicle coverage is not required when rejected in writing, on a form furnished by the insurer describing the coverage, by a named insured, and the rejection carries over to renewals unless coverage is later requested in writing. Section 3902(a)(2) makes property damage coverage subject to a $250 deductible per accident unless the insured and insurer agree in writing to a different deductible. Oral rejections are not valid, coverage can be rejected, and $500 and $100 are not the statutory deductible. See 18 Del. C. § 3902.

• A. 20 days; 10 days for nonpayment
• B. At least 30 days with the reason; at least 15 days with the reason for nonpayment
• C. 45 days; 20 days for nonpayment
• D. 60 days; 30 days for nonpayment

Correct answer: B. At least 30 days with the reason; at least 15 days with the reason for nonpayment

Explanation: Section 3905(a) provides that no cancellation of an auto policy subject to § 3904 is effective unless notice is mailed or delivered to the named insured at least 30 days before the effective date, accompanied by the reason, except that cancellation for nonpayment of premium requires at least 15 days' notice with the reason. Ten days is the property insurance nonpayment notice (§ 4122), not auto; 20, 45 and 60 days are not the auto periods. See 18 Del. C. § 3905.

• A. Liability for injury or damage arising from ongoing operations at the insured's job site
• B. Liability for injury or damage occurring to customers while visiting the insured's premises
• C. Liability for the cost of recalling or replacing a product that is found to be defective after sale
• D. Liability for injury or damage arising from products sold or work completed away from premises

Correct answer: D. Liability for injury or damage arising from products sold or work completed away from premises

Explanation: Products-completed operations hazard refers to liability for bodily injury or property damage arising from the insured's products after they leave the insured's control or from completed work away from the premises.

• A. Liability coverage for injuries or damage occurring on insured premises or from ongoing operations
• B. Liability coverage for injuries or damage caused by the insured's products after they are sold
• C. Property coverage for damage to the insured's own building and equipment used in its operations
• D. Liability coverage for injuries or damage arising from the insured's work after it is completed

Correct answer: A. Liability coverage for injuries or damage occurring on insured premises or from ongoing operations

Explanation: Premises and operations coverage is part of general liability insurance that covers bodily injury or property damage occurring on the insured's premises or arising from the insured's ongoing business operations.

• A. Coverage for bodily injury to customers caused by a product the insured promoted in its ads
• B. Coverage for offenses like libel, slander, false arrest, and copyright infringement in advertising
• C. Coverage for medical expenses and lost wages after an auto accident regardless of fault
• D. Coverage for the cost of reprinting or rerunning an advertisement that contained a factual error

Correct answer: B. Coverage for offenses like libel, slander, false arrest, and copyright infringement in advertising

Explanation: Personal and advertising injury coverage in CGL policies covers offenses including false arrest, libel, slander, invasion of privacy, and copyright infringement committed in the course of advertising.

• A. The full underlying policy limit
• B. Nothing - the umbrella pays from the first dollar
• C. A self-insured retention (SIR)
• D. Double the homeowners deductible

Correct answer: C. A self-insured retention (SIR)

Explanation: When an umbrella responds to a loss its underlying policies do not cover at all, the insured first pays the self-insured retention - commonly a few hundred to a few thousand dollars. When the umbrella instead sits above an underlying policy that does cover the loss, the underlying policy's limit serves as the attachment point and no retention applies.

• A. Coverage placed with a non-admitted insurer when admitted carriers decline the risk
• B. Coverage that shares each loss proportionally with the insured's primary policy
• C. Coverage that broadens the terms of the underlying policy to fill gaps in protection
• D. Coverage that pays only after underlying policy limits are exhausted

Correct answer: D. Coverage that pays only after underlying policy limits are exhausted

Explanation: Excess liability insurance provides additional limits above an underlying policy but follows the same terms and conditions. Unlike umbrella policies, it typically doesn't broaden coverage.

• A. Liability coverage for vehicles used for business that aren't owned by the insured
• B. Physical damage coverage for vehicles the business leases under a long-term contract
• C. Liability coverage for vehicles the business owns and registers in its own name
• D. Liability coverage for employees' personal vehicles while driven for personal errands

Correct answer: A. Liability coverage for vehicles used for business that aren't owned by the insured

Explanation: Hired and non-owned auto coverage provides liability protection when employees use rented vehicles (hired) or their personal vehicles (non-owned) for business purposes.

• A. Motorcycle insurance
• B. Commercial auto coverage required for businesses transporting goods or passengers for hire
• C. Moving company coverage
• D. Insurance for car carriers

Correct answer: B. Commercial auto coverage required for businesses transporting goods or passengers for hire

Explanation: Motor carrier insurance is specialized commercial auto coverage for trucking companies and other businesses that transport goods or passengers for hire, meeting DOT and state requirements.

• A. Coverage for the truck or vessel itself against physical damage while carrying goods
• B. Liability coverage for a carrier's bodily injury claims arising from its delivery vehicles
• C. Coverage for goods being transported against loss or damage during transit
• D. Coverage for goods stored in the insured's warehouse against fire, theft, and vandalism

Correct answer: C. Coverage for goods being transported against loss or damage during transit

Explanation: Cargo insurance covers goods while being transported from one location to another against loss or damage during transit. It can cover various modes including truck, rail, air, and ocean shipping.