Indiana Property & Casualty Insurance Practice Exam Free - 2026

• A. Yes, gifts are permitted with no limit if not deducted from the premium
• B. No, gifts of any value tied to a sale are rebates in Indiana
• C. Yes, because each gift is under $250
• D. No, because the reasonable value of all gifts to one person in a year may not exceed $250 and gifts may not be cash

Correct answer: D. No, because the reasonable value of all gifts to one person in a year may not exceed $250 and gifts may not be cash

Explanation: IC 27-1-47-1(b)(1) allows an insurer or producer to give gifts in connection with marketing or retaining a policy only if the reasonable value of all gifts given to a person in one year does not exceed two hundred fifty dollars ($250), and (c) prohibits cash gifts; Celeste's $300 total exceeds the annual limit. Gifts are otherwise rebates under IC 27-4-1-4(a)(8), so an unlimited gift rule is wrong (A). Modest gifts within the cap are lawful, so a total ban is wrong (B). The $250 limit is an annual aggregate per person, not per gift (C). See Ind. Code § 27-1-47-1.

• A. $10,000 per act
• B. $50,000 per act, because the insurer knew or should have known it was violating the law
• C. $25,000 per act regardless of knowledge
• D. $100,000 per act

Correct answer: B. $50,000 per act, because the insurer knew or should have known it was violating the law

Explanation: IC 27-4-1-6(a)(1) permits a civil penalty of not more than twenty-five thousand dollars ($25,000) for each act or violation, but if the person knew or reasonably should have known it was in violation, the penalty may be not more than fifty thousand dollars ($50,000) per act; the insurer's knowing conduct triggers the higher cap. Ten thousand dollars is the top licensing-law penalty under IC 27-1-15.6-12(f) (A). Twenty-five thousand dollars is the cap only for violations without knowledge (C). One hundred thousand dollars is not an Indiana figure (D). See Ind. Code § 27-4-1-6.

• A. At least once every three years
• B. Only when a complaint is filed
• C. Every year
• D. At least once every five years

Correct answer: D. At least once every five years

Explanation: IC 27-1-3.1-8(a)(2) requires the commissioner to conduct an examination of every insurer licensed in Indiana at least once every five (5) years, and (a)(1) allows examinations as often as the commissioner considers appropriate. Three years and annual examinations are not the statutory minimum (A, C). Examinations are mandatory on the five-year cycle, not merely complaint-driven (B). See Ind. Code § 27-1-3.1-8.

• A. $25,000 per person bodily injury, $50,000 per accident bodily injury, $25,000 property damage
• B. $25,000 per person bodily injury, $50,000 per accident bodily injury, $10,000 property damage
• C. $50,000 per person bodily injury, $100,000 per accident bodily injury, $50,000 property damage
• D. $20,000 per person bodily injury, $40,000 per accident bodily injury, $15,000 property damage

Correct answer: A. $25,000 per person bodily injury, $50,000 per accident bodily injury, $25,000 property damage

Explanation: IC 9-25-4-5 sets the minimum amounts of financial responsibility at $25,000 for bodily injury to or death of one person, $50,000 for two or more persons in one accident, and, beginning July 1, 2018, $25,000 for property damage in one accident. The $10,000 property damage limit applied only before July 1, 2018 (B). The $50,000/$100,000/$50,000 limits are the TNC driver requirement while logged on under IC 8-2.1-19.1-8, not the general minimum (C). The 20/40/15 figures are not Indiana limits (D). See Ind. Code § 9-25-4-5.

• A. The identity of a life insurance beneficiary
• B. A workers compensation class code only
• C. The amount of loss
• D. Whether the insured is old enough for health insurance

Correct answer: C. The amount of loss

Explanation: An appraisal condition is commonly used when the insurer and insured disagree about the amount of a covered property loss, not whether coverage exists.

• A. Automatic application of any coverage restrictions the insurer adopts during the policy period without notice
• B. The insured's right to request broadened coverage by endorsement upon payment of additional premium
• C. A refund of unearned premium when the insurer's newly filed forms would have cost the insured less
• D. Automatic application of certain coverage broadening changes without additional premium for a specified period

Correct answer: D. Automatic application of certain coverage broadening changes without additional premium for a specified period

Explanation: A liberalization condition can automatically extend certain broadened coverage changes to existing policies when conditions in the policy are met.

• A. The insured intentionally misrepresents or conceals material facts
• B. The insured innocently misstates an immaterial detail on the application
• C. The producer withholds a material fact that is known to the insurer
• D. The insured files a claim for a loss that later turns out not to be covered

Correct answer: A. The insured intentionally misrepresents or conceals material facts

Explanation: Concealment, misrepresentation, or fraud involving material facts can affect coverage rights under policy conditions and applicable law.

• A. The percentage of each covered loss the insured shares with the insurer
• B. The amount the insured must absorb before the policy pays a covered loss
• C. The minimum amount of insurance the insured must carry to avoid penalty
• D. The most the insurer will pay for any one covered loss during the term

Correct answer: B. The amount the insured must absorb before the policy pays a covered loss

Explanation: A deductible is the portion of a covered loss the insured is responsible for before insurance payment applies, subject to policy terms.

• A. Wind damage during a covered storm
• B. Fire from lightning
• C. Normal wear and tear
• D. Smoke damage from a covered fire

Correct answer: C. Normal wear and tear

Explanation: Normal wear and tear, deterioration, and maintenance-related problems are commonly excluded because insurance is intended for fortuitous losses, not ordinary upkeep.

• A. Destroy damaged property before inspection in every case
• B. Admit liability to every claimant immediately
• C. Refuse to cooperate with the insurer
• D. Give prompt notice of the loss to the insurer

Correct answer: D. Give prompt notice of the loss to the insurer

Explanation: Policies commonly require the insured to provide prompt notice, protect property from further damage, cooperate with the insurer, and submit requested documentation.

• A. How coverage applies when more than one policy may cover the same loss
• B. Which of two policies must be cancelled when both cover the same property
• C. How the insurer recovers from a negligent third party after paying a claim
• D. How a loss is split when two insureds share ownership of the same property

Correct answer: A. How coverage applies when more than one policy may cover the same loss

Explanation: Other insurance provisions explain how a loss is shared or coordinated when multiple policies may apply to the same covered claim.

• A. An insured names two beneficiaries
• B. Only part of a matched pair or set is damaged
• C. Two auto policies renew on the same date
• D. An employee has two jobs

Correct answer: B. Only part of a matched pair or set is damaged

Explanation: A pair or set condition addresses how payment is handled when only part of a matched pair or set is damaged, subject to policy wording.