Maine Property & Casualty Insurance Practice Exam Free - 2026

• A. At least 10 days; the reason is acceptable
• B. At least 60 days; the reason is acceptable
• C. At least 30 days; "underwriting reasons" alone is not an acceptable explanation, so the reason must be explicit
• D. At least 20 days; no reason need be given

Correct answer: C. At least 30 days; "underwriting reasons" alone is not an acceptable explanation, so the reason must be explicit

Explanation: 24-A M.R.S. § 2917 requires a notice of intention not to renew to be received by the named insured at least 30 days before the expiration date, accompanied by explicit reasons and notice of the right to a hearing within 30 days; it states that explanations such as "underwriting reasons," "loss record" or "credit report" are not by themselves acceptable. Ten and 20 days are the cancellation periods under § 2915, 60 days is not a Maine figure, and a reason is mandatory. See 24-A M.R.S. § 2917.

• A. Within the 36-month period preceding the yearly anniversary date; nonrenewal is effective only on the policy's yearly anniversary
• B. Within the 12-month period preceding the anniversary; nonrenewal may take effect at any renewal
• C. Within the 60-month period preceding the anniversary; nonrenewal is effective at the next monthly billing date
• D. Within the 24-month period preceding the anniversary; nonrenewal is effective 45 days after notice

Correct answer: A. Within the 36-month period preceding the yearly anniversary date; nonrenewal is effective only on the policy's yearly anniversary

Explanation: 24-A M.R.S. § 2916-A allows nonrenewal only for a ground that would justify cancellation or for listed grounds (including an OUI conviction, specified other convictions, 2 or more chargeable accidents, or a change making the vehicle uninsurable) that occurred during the 36-month period preceding the yearly anniversary date, and provides that a nonrenewal is effective only on the policy's yearly anniversary date. Twelve, 24 and 60 months and mid-term effective dates are not the statute's terms. See 24-A M.R.S. § 2916-A.

• A. File suit in Superior Court within 60 days; the insured bears the burden
• B. Request a hearing before the Bureau within 10 days; the burden is shared equally
• C. Nothing; nonrenewal decisions are not reviewable
• D. Request a hearing before the superintendent within 30 days of receiving the statement; the burden of proof is on the insurer, and the superintendent may keep the policy in force pending the hearing

Correct answer: D. Request a hearing before the superintendent within 30 days of receiving the statement; the burden of proof is on the insurer, and the superintendent may keep the policy in force pending the hearing

Explanation: 24-A M.R.S. § 2920 lets a named insured who receives a statement of reason for cancellation or nonrenewal request a hearing before the superintendent within 30 days, places the burden of proof on the insurer, and authorizes the superintendent to order the policy continued pending the hearing and, if the insurer prevails, for 14 days so the insured can find other coverage. The remedy is an administrative hearing rather than a suit, the window is 30 days not 10, and the burden rests on the insurer alone. See 24-A M.R.S. § 2920.

• A. Up to $300,000 on the fire loss and the unearned premium in excess of $50
• B. The full $450,000 loss and the full $600 unearned premium
• C. Up to $500,000 on the fire loss and up to $25,000 unearned premium with no deductible
• D. Up to $100,000 on the fire loss and no unearned premium

Correct answer: A. Up to $300,000 on the fire loss and the unearned premium in excess of $50

Explanation: 24-A M.R.S. § 4438(1)(A) limits the association to $300,000 per claim for covered claims other than workers' compensation (which is paid in full), cybersecurity claims ($500,000 per insured event) and unearned premium (not more than $25,000 per policy), and provides that it pays only the amount of unearned premium in excess of $50. B ignores the cap; $500,000 is the cybersecurity limit and the $50 threshold applies to unearned premium; $100,000 is not a Maine figure. See 24-A M.R.S. § 4438.

• A. bind coverage until the policy is issued
• B. summarize the policy's key terms for the insured
• C. record the insured's premium payment history
• D. add to, remove, or change policy terms

Correct answer: D. add to, remove, or change policy terms

Explanation: An endorsement modifies the insurance contract by changing coverage, limits, exclusions, or conditions.

• A. Freezes the premium for three years
• B. Automatically increases the building coverage limit by a set percentage over time
• C. Waives the deductible during periods of high inflation
• D. Converts the policy from replacement cost to actual cash value

Correct answer: B. Automatically increases the building coverage limit by a set percentage over time

Explanation: Construction costs rise, and a limit that was adequate at issue can quietly fall below what rebuilding would cost - inviting a coinsurance penalty. The inflation guard endorsement automatically raises the covered limit by a chosen annual percentage so coverage keeps pace without re-underwriting each year. The premium rises with the limit; deductibles and the valuation basis are unchanged.

• A. names a second party to receive claim payments for damaged property
• B. adds another party as an insured for specified coverage purposes
• C. transfers the policy to a new owner with the insurer's consent
• D. designates a party the insurer agrees not to pursue in subrogation

Correct answer: B. adds another party as an insured for specified coverage purposes

Explanation: Additional insured endorsements extend insured status to another party for certain claims, subject to the endorsement wording.

• A. extends insured status to a specified party for claims arising from the insured's work
• B. agrees to pay a specified party directly before the named insured receives any payment
• C. agrees not to pursue recovery from a specified party after paying a covered loss
• D. gives up its right to cancel the policy while the specified party holds an interest

Correct answer: C. agrees not to pursue recovery from a specified party after paying a covered loss

Explanation: A waiver of subrogation prevents the insurer from seeking recovery from a specified party, when the endorsement applies.

• A. a contractor doing work for the insured under a written agreement
• B. a tenant who occupies part of the insured building under a lease
• C. an employee who is injured while using the insured's equipment
• D. a lender or other party with a financial interest in covered property

Correct answer: D. a lender or other party with a financial interest in covered property

Explanation: A loss payable clause can give a lender or other interested party rights to claim payments involving covered property.

• A. endorsement wording can change the meaning of coverage, limits, and exclusions
• B. the base policy wording overrides any endorsement that conflicts with it
• C. endorsements expire at the first renewal unless they are re-signed
• D. endorsements bind the insurer but do not bind the insured who accepted them

Correct answer: A. endorsement wording can change the meaning of coverage, limits, and exclusions

Explanation: An endorsement is part of the policy and can significantly broaden, restrict, or clarify coverage.

• A. the cause of loss is not specifically listed as excluded
• B. the cause of loss is specifically listed as covered
• C. the loss exceeds the deductible stated in the schedule
• D. the cause of loss is both sudden and accidental in nature

Correct answer: B. the cause of loss is specifically listed as covered

Explanation: Named perils coverage applies only to causes of loss named in the policy or endorsement.

• A. They must be attached at policy inception and cannot be added during the term.
• B. They broaden coverage but are not permitted to add exclusions.
• C. They should be read because they can change the original policy wording.
• D. They require a separate premium and a separate policy number.

Correct answer: C. They should be read because they can change the original policy wording.

Explanation: Endorsements are contractual changes and should be read together with the policy.