Illinois Property & Casualty Insurance Practice Exam Free - 2026

• A. There is no response deadline until suit is filed
• B. The insurer must respond within 60 days
• C. Pertinent claim communications must be acknowledged with reasonable promptness, defined by rule as at most 15 working days; claim forms must be provided within 15 working days of a request; and a listed act is an improper claims practice if committed knowingly or with such frequency as to indicate a persistent tendency
• D. The insurer must pay the claim in full once 30 days pass

Correct answer: C. Pertinent claim communications must be acknowledged with reasonable promptness, defined by rule as at most 15 working days; claim forms must be provided within 15 working days of a request; and a listed act is an improper claims practice if committed knowingly or with such frequency as to indicate a persistent tendency

Explanation: Failing to acknowledge pertinent claim communications with reasonable promptness is an enumerated improper claims practice, together with failing to adopt standards for prompt investigation, not attempting good-faith settlement where liability is reasonably clear, compelling policyholders to sue, failing to affirm or deny coverage within a reasonable time after proof of loss, and failing to provide claim forms within 15 working days of a request. Department rules define reasonable promptness as a maximum of 15 working days and prompt investigation as contact within 21 working days of a loss notice where liability is reasonably clear. The acts violate the Code when committed knowingly or with such frequency as to indicate a persistent tendency. See 215 ILCS 5/154.5, 5/154.6; 50 Ill. Adm. Code 919.40.

• A. Any misstatement voids the policy
• B. Only when the misstatement was made under oath
• C. Never, once the first premium is paid
• D. Only if it was made with actual intent to deceive or materially affects the acceptance of the risk or the hazard assumed by the company

Correct answer: D. Only if it was made with actual intent to deceive or materially affects the acceptance of the risk or the hazard assumed by the company

Explanation: No misrepresentation or false warranty made in negotiating a policy defeats or avoids it unless it was made with actual intent to deceive or materially affects either the acceptance of the risk or the hazard assumed by the company. For the property and casualty policy types in Section 143.13 (not life, accident and health, fidelity and surety, or ocean marine), a policy or renewal may not be rescinded after it has been in effect for one year or one policy term, whichever is less. See 215 ILCS 5/154.

• A. The producer may add the provision because certificates are informational only
• B. A certificate may not amend, extend or alter the policy's coverage or confer rights beyond it; notice rights depend on the policy; a certificate with false or misleading information is prohibited and void
• C. The certificate is valid if the contractor pays a fee
• D. Certificates may extend coverage for up to 60 days

Correct answer: B. A certificate may not amend, extend or alter the policy's coverage or confer rights beyond it; notice rights depend on the policy; a certificate with false or misleading information is prohibited and void

Explanation: A certificate of insurance is evidence of property or casualty coverage, not a policy or endorsement. It may not amend, extend or alter the policy's coverage, confer rights beyond it, or warrant that the policy meets a contract's requirements, and notice of cancellation or material change is governed by the policy. Preparing, issuing, requesting or requiring a certificate with false or misleading information, or one that expands coverage, is prohibited; such a certificate is void and using a misleading form is an unfair and deceptive practice. See 215 ILCS 5/155.45.

• A. The insurer may nonrenew because the agency relationship has ended
• B. The insurer must offer renewal through another agency for one more term
• C. No Illinois-authorized company may cancel, terminate or refuse to renew a policy on the ground that its contract with the agent who obtained the policy has been terminated
• D. Nonrenewal is allowed with 90 days' notice

Correct answer: C. No Illinois-authorized company may cancel, terminate or refuse to renew a policy on the ground that its contract with the agent who obtained the policy has been terminated

Explanation: No company authorized to do business in Illinois may cancel, terminate or refuse to renew any policy on the ground that its contract with the agent through whom the policy was obtained has been terminated. The rule does not alter agreements about ownership of expirations where the agent can place the policy with another insurer with similar coverage to the insured's satisfaction. See 215 ILCS 5/141.01.

• A. The owner's personal credit card rewards
• B. Payroll by classification
• C. The number of life insurance beneficiaries
• D. The homeowner's roof age only

Correct answer: B. Payroll by classification

Explanation: Workers compensation premiums commonly consider payroll, job classification, rates, and experience modification factors where applicable.

• A. The employer's total payroll divided by the number of employees
• B. The hazard level assigned to each job classification code
• C. The employer's loss experience compared with similar employers
• D. The years the employer has been continuously insured with the same carrier

Correct answer: C. The employer's loss experience compared with similar employers

Explanation: An experience modification factor adjusts premium based on an employer's loss experience compared with expected losses for similar businesses.

• A. Homeowners liability coverage
• B. A guaranteed retirement annuity
• C. Collision repair for the employee's personal car after any accident
• D. Medical benefits for covered work-related injuries

Correct answer: D. Medical benefits for covered work-related injuries

Explanation: Workers compensation commonly includes medical benefits for covered work-related injuries and may also include disability, rehabilitation, or death benefits depending on the law.

• A. Movable property, property in transit, or specialized property exposures
• B. Cargo carried aboard vessels on the open sea and the vessels themselves
• C. Permanent buildings and fixed structures at a single described premises location
• D. Owned autos, hired autos, and nonowned autos used in the business

Correct answer: A. Movable property, property in transit, or specialized property exposures

Explanation: Inland marine coverage is often used for movable property, property in transit, contractors equipment, fine arts, and other specialized property exposures.

• A. A contractor's liability for faulty completed work
• B. Mobile tools and equipment used by a contractor
• C. Vehicles the contractor drives on public highways
• D. A building under construction until it is completed

Correct answer: B. Mobile tools and equipment used by a contractor

Explanation: A contractors equipment floater can insure mobile equipment and tools used at job sites, in transit, or at temporary locations, subject to policy terms.

• A. A customer of the insured becomes insolvent and cannot pay an outstanding invoice
• B. The insured's bookkeeper embezzles payments received from customers
• C. Covered records of amounts owed to the insured are damaged or destroyed
• D. The insured's records of amounts it owes to suppliers are lost in a fire

Correct answer: C. Covered records of amounts owed to the insured are damaged or destroyed

Explanation: Accounts receivable coverage can help when records of amounts owed to the insured are damaged by a covered loss, making collection difficult or impossible.

• A. The face value of money, securities, and negotiable instruments stolen from the premises
• B. Amounts the insured cannot collect because its customer billing records were destroyed
• C. The insured's liability to clients whose confidential documents were exposed in a data breach
• D. The cost to research, replace, or restore important documents after covered loss

Correct answer: D. The cost to research, replace, or restore important documents after covered loss

Explanation: Valuable papers coverage can pay costs to research, replace, or restore valuable documents and records after covered damage or loss.

• A. Property while being transported
• B. Personal liability for libel
• C. Homeowners medical payments only
• D. Employee retirement income

Correct answer: A. Property while being transported

Explanation: A transportation floater is an inland marine form that can cover property while it is in transit, subject to policy conditions.