Idaho Property & Casualty Insurance Practice Exam Free - 2026

• A. Within the 12 months before the notice
• B. Within the 24 months before the notice
• C. Within the 36 months before the notice
• D. Within the 60 months before the notice

Correct answer: C. Within the 36 months before the notice

Explanation: Idaho Code 41-2507(7)(a) permits cancellation or nonrenewal when the named insured or any operator residing in the household or customarily operating an insured automobile has, within the thirty-six (36) months prior to the notice of cancellation or nonrenewal, had a driver's license under suspension or revocation; the same 36-month look-back applies to undisclosed accidents and violations, drug addiction and convictions under other subsections. Twelve, twenty-four and sixty months are not the statutory period. See Idaho Code § 41-2507.

• A. Because the restrictions on cancellation grounds do not apply to a policy that has been in effect less than 60 days when the notice is mailed, unless it is a renewal
• B. Because a new policy may be cancelled for any reason during its first 30 days
• C. Because the restrictions do not apply during the first 90 days of any policy
• D. Because the restrictions do not apply during the first 45 days of a new policy

Correct answer: A. Because the restrictions on cancellation grounds do not apply to a policy that has been in effect less than 60 days when the notice is mailed, unless it is a renewal

Explanation: Idaho Code 41-2506(2) provides that sections 41-2506 through 41-2512, which limit cancellation grounds and set notice requirements, do not apply to any policy that has been in effect less than sixty (60) days at the time notice of cancellation is mailed or delivered, unless it is a renewal policy. Rachel's policy has been in force 40 days, so the grounds in 41-2507 are not yet mandatory. Thirty, ninety and forty-five days are not the statutory threshold; forty-five days is the commercial nonrenewal notice under 41-1842. See Idaho Code § 41-2506.

• A. At least 30 days
• B. At least 45 days; if mailed later, coverage continues until 45 days after the notice
• C. At least 60 days
• D. At least 20 days

Correct answer: B. At least 45 days; if mailed later, coverage continues until 45 days after the notice

Explanation: Idaho Code 41-1842(4)(a) requires an insurer declining to renew a commercial property, commercial liability or commercial multiperil policy to mail or deliver written notice at least forty-five (45) days before the expiration date, and if the notice is mailed less than 45 days before expiration, coverage remains in effect until 45 days after the notice is mailed or delivered. Thirty days is the commercial cancellation notice under 41-1842(3) (ten days for nonpayment), twenty days is the private passenger auto cancellation notice under 41-2508, and sixty days is the new-policy period under 41-1842(3)(a). See Idaho Code § 41-1842.

• A. No later than 30 days before the intended action
• B. No later than 60 days before the intended action
• C. No later than 90 days before the intended action
• D. No later than 120 days before the intended action

Correct answer: D. No later than 120 days before the intended action

Explanation: Idaho Code 41-1841(1) requires an insurer intending to implement block cancellations or block nonrenewals, including withdrawal from a line or from the business of insurance in Idaho, to give the Director written notice no later than one hundred twenty (120) days before the intended action, stating the reasons; failure to comply renders the cancellations or nonrenewals void. Sixty days is the point at which the action is deemed approved unless the Director has already ruled under 41-1841(2), not the notice period; thirty and ninety days are not figures in the section. See Idaho Code § 41-1841.

• A. Increase loss risk and restrict or reduce coverage under policy conditions
• B. Trigger an automatic premium refund for each month the building sits unoccupied
• C. Void the policy immediately on the first day the building becomes vacant
• D. Shift the coinsurance requirement from the insured to the mortgageholder

Correct answer: A. Increase loss risk and restrict or reduce coverage under policy conditions

Explanation: Vacancy can increase risk of certain losses. Commercial property policies often include vacancy conditions that may limit or restrict coverage after a specified vacancy period.

• A. Share every covered loss with the insurer on a fixed percentage basis
• B. Carry insurance close to the required percentage of the property's value
• C. Insure the property for its full market value rather than replacement cost
• D. Select the highest available deductible to keep premiums as low as possible

Correct answer: B. Carry insurance close to the required percentage of the property's value

Explanation: A coinsurance clause encourages adequate insurance-to-value. If the insured carries too little insurance, a coinsurance penalty may reduce a partial-loss payment.

• A. Professional liability for errors, omissions, and negligent advice by the insured in its trade or occupation
• B. Direct physical damage to the insured's own buildings, business personal property, and stock from covered perils
• C. Business liability for covered bodily injury, property damage, and certain personal and advertising injury claims
• D. Liability for bodily injury to the insured's own employees arising out of and in the course of their employment

Correct answer: C. Business liability for covered bodily injury, property damage, and certain personal and advertising injury claims

Explanation: CGL coverage generally addresses common business liability exposures, including covered bodily injury, property damage, and personal and advertising injury claims.

• A. Personal and advertising injury liability
• B. Medical payments regardless of fault
• C. Damage to the insured's own premises and stock
• D. Bodily injury and property damage liability

Correct answer: D. Bodily injury and property damage liability

Explanation: Coverage A of a CGL policy generally covers bodily injury and property damage liability, subject to definitions, exclusions, and conditions.

• A. Personal and advertising injury liability
• B. Bodily injury and property damage liability
• C. Medical payments without regard to fault
• D. Products-completed operations liability

Correct answer: A. Personal and advertising injury liability

Explanation: Coverage B of a CGL policy generally applies to personal and advertising injury liability, such as certain covered offenses listed in the policy.

• A. Medical payments for the insured's own employees injured on the premises
• B. Medical payments for certain injuries without regard to legal liability
• C. Defense costs for personal and advertising injury suits within the limits
• D. Bodily injury damages the insured becomes legally obligated to pay to others

Correct answer: B. Medical payments for certain injuries without regard to legal liability

Explanation: Coverage C generally provides limited medical payments for certain injuries on or near the insured premises or because of the insured's operations, regardless of fault.

• A. A customer trips over stock while shopping inside the insured's store
• B. A defective product must be withdrawn from the market before anyone is hurt
• C. A product sold by the insured injures a customer after the sale
• D. A subcontractor damages a client's floor while work is still in progress

Correct answer: C. A product sold by the insured injures a customer after the sale

Explanation: Products-completed operations coverage can apply to covered liability arising from the insured's products or completed work after the product or work has left the insured's control.

• A. Liability arising from the insured's products after they have left its hands
• B. Direct damage to the insured's own building and contents at the described premises
• C. Liability for injuries to the insured's employees while working on the premises
• D. Liability arising from the insured's premises or ongoing business operations

Correct answer: D. Liability arising from the insured's premises or ongoing business operations

Explanation: Premises and operations coverage addresses covered liability arising from the insured's location or ongoing operations, subject to policy exclusions and conditions.