Nebraska Property & Casualty Insurance Practice Exam Free - 2026

• A. 15 days
• B. 10 days
• C. 30 days
• D. 45 days

Correct answer: A. 15 days

Explanation: 210 Neb. Admin. Code ch. 60, § 006.01 requires every insurer to acknowledge receipt of notice of a claim within fifteen days unless payment is made within that period, § 006.04 requires claim forms and instructions within fifteen days, § 007 requires the investigation to begin within fifteen days of notification, and § 008.01 requires the claimant to be told of acceptance or denial within fifteen days after receipt of proof of loss. Thirty days is the interval for follow-up letters when an investigation remains incomplete under § 008.02, and ten and forty-five days are not periods in the rule. See 210 Neb. Admin. Code ch. 60.

• A. $1,000
• B. $15,000
• C. $5,000
• D. $30,000

Correct answer: C. $5,000

Explanation: Neb. Rev. Stat. § 44-6607(1) subjects a person found by a court, in an action initiated by the Director, to have committed a fraudulent insurance act under § 44-6604 to a civil penalty not exceeding five thousand dollars for the first violation, ten thousand dollars for the second, and fifteen thousand dollars for each subsequent violation, and provides that the civil action is in lieu of a criminal prosecution under § 28-631. One thousand dollars is the producer-licensing administrative fine under § 44-4059, fifteen thousand dollars applies only to a third or later fraud violation, and thirty thousand dollars is the aggregate unfair trade practice penalty under § 44-1529. See Neb. Rev. Stat. § 44-6607.

• A. Up to $1,000 per violation, with an aggregate cap of $150,000
• B. Up to $15,000 per violation, with an aggregate cap of $30,000
• C. Up to $5,000 per violation, with an aggregate cap of $30,000
• D. Up to $1,000 per violation, with an aggregate cap of $30,000; if flagrant, up to $15,000 per violation and $150,000 aggregate

Correct answer: D. Up to $1,000 per violation, with an aggregate cap of $30,000; if flagrant, up to $15,000 per violation and $150,000 aggregate

Explanation: Neb. Rev. Stat. § 44-1529(1) authorizes, after a cease and desist finding, a monetary penalty of not more than one thousand dollars per violation, not to exceed an aggregate of thirty thousand dollars, unless the violation was committed flagrantly in conscious disregard of the Act, in which case the penalty is not more than fifteen thousand dollars per violation with a one hundred fifty thousand dollar aggregate; § 44-1529(2) adds license suspension or revocation if the insurer knew or should have known of the violation. The $150,000 aggregate pairs only with the flagrant $15,000 per-violation figure, and five thousand dollars is the Insurance Fraud Act first-violation penalty under § 44-6607. See Neb. Rev. Stat. § 44-1529.

• A. $25,000 / $50,000 / $15,000
• B. $25,000 / $50,000 / $25,000
• C. $30,000 / $60,000 / $25,000
• D. $50,000 / $100,000 / $25,000

Correct answer: B. $25,000 / $50,000 / $25,000

Explanation: Neb. Rev. Stat. § 60-509 requires an automobile liability policy or bond to provide limits of not less than $25,000 for bodily injury to or death of one person, $50,000 for bodily injury to or death of two or more persons, and $25,000 for injury to or destruction of property of others in any one accident; § 60-534 and the definition of proof of financial responsibility in § 60-346 and § 60-501(14) repeat the same 25/50/25 figures. A $15,000 property damage limit and the higher 30/60 and 50/100 bodily injury limits are not the Nebraska minimums. See Neb. Rev. Stat. § 60-509.

• A. The policy is automatically void
• B. The insurer may reduce the amount it pays on a partial loss because the home is underinsured
• C. Claims are unaffected as long as premiums were paid
• D. Only total losses are penalized

Correct answer: B. The insurer may reduce the amount it pays on a partial loss because the home is underinsured

Explanation: Homeowners replacement cost provisions generally require the dwelling to be insured to at least 80% of its full replacement cost; when coverage falls below that threshold, the insurer may reduce what it pays on a claim. Underinsurance affects partial-loss settlements rather than voiding the policy, which is why reviewing the limit periodically matters.

• A. $300,000, because the first two claims used $1.7 million of the $2 million aggregate
• B. $600,000, because it is under the occurrence limit
• C. $1,000,000, the full occurrence limit
• D. Nothing, because only two occurrences are covered per period

Correct answer: A. $300,000, because the first two claims used $1.7 million of the $2 million aggregate

Explanation: Each loss is capped by the $1 million per-occurrence limit, and all losses together are capped by the $2 million aggregate for the policy period. The first two claims ($900,000 + $800,000 = $1.7 million) leave only $300,000 of aggregate, so the third claim is paid $300,000 even though it is below the occurrence limit. There is no fixed number of covered occurrences.

• A. $220,000, the full amount of both claims
• B. $300,000, the per-accident limit
• C. $180,000: the first victim is capped at the $100,000 per-person limit and the second is paid $80,000 in full
• D. $200,000, split equally between the victims

Correct answer: C. $180,000: the first victim is capped at the $100,000 per-person limit and the second is paid $80,000 in full

Explanation: Split limits of 100/300/50 mean $100,000 bodily injury per person, $300,000 bodily injury per accident, and $50,000 property damage. Each victim's recovery is first capped at the per-person limit: $100,000 + $80,000 = $180,000, which is within the $300,000 per-accident cap. A single combined single limit policy of $300,000 would instead have paid both claims in full - a key difference between the two structures.

• A. $500,000, because defense costs used up part of the limit
• B. $560,000, because defense costs are supplementary payments made in addition to the policy limits
• C. $440,000, the limit minus defense costs
• D. $530,000, splitting the defense cost with the insured

Correct answer: B. $560,000, because defense costs are supplementary payments made in addition to the policy limits

Explanation: In standard primary liability policies such as the CGL, defense costs are supplementary payments paid in addition to the limits of liability - they do not erode the amount available for damages. So the insurer pays the $500,000 judgment plus the $60,000 defense, $560,000 total. Policies that reduce limits by defense costs exist but are the exception, not the standard form.

• A. Slander is uninsurable under any policy
• B. Umbrellas always duplicate the underlying policy exactly
• C. Umbrellas pay only after every other policy in the market is exhausted
• D. An umbrella can cover certain claims the underlying policies do not cover at all, in addition to paying amounts above underlying limits

Correct answer: D. An umbrella can cover certain claims the underlying policies do not cover at all, in addition to paying amounts above underlying limits

Explanation: Umbrella liability insurance provides two kinds of protection: payments in excess of underlying policy limits, and coverage for some exposures - such as libel or slander - that the underlying policies do not cover. When the umbrella responds to a claim no underlying policy covers, the insured typically bears an initial retained amount before the umbrella pays.

• A. The claim is paid from the next year's limits in advance
• B. The occurrence limit still applies even though the aggregate is gone
• C. The insurer must reinstate the aggregate on request at no charge
• D. Nothing is payable for the September claim; a fresh aggregate limit becomes available only when a new policy period begins

Correct answer: D. Nothing is payable for the September claim; a fresh aggregate limit becomes available only when a new policy period begins

Explanation: The aggregate limit is the most the policy will pay for all covered losses during a single policy period. Once it is exhausted, no further claims are payable in that period; the aggregate is restored when a new policy period starts, such as at renewal. The occurrence limit cannot resurrect coverage once the aggregate is spent, and reinstatement mid-term is not automatic or free.

• A. Covered in full as ordinary property damage
• B. Denied under the CGL pollution exclusion, which removes coverage for damage caused by pollutants
• C. Covered because the leak was on the insured's own land
• D. Denied only if the shop was fined by regulators

Correct answer: B. Denied under the CGL pollution exclusion, which removes coverage for damage caused by pollutants

Explanation: Standard CGL policies exclude liability for injury or property damage caused by the release of pollutants, and pollution cleanup claims are precisely what the exclusion targets. Where the leak started does not restore coverage, and the exclusion applies to civil damage claims, not just regulatory fines.

• A. Purchase a separate pollution liability (environmental impairment liability) policy designed for pollution cleanup and third-party claims
• B. Raise the CGL occurrence limit
• C. Add an equipment breakdown endorsement
• D. Rely on the state guaranty fund

Correct answer: A. Purchase a separate pollution liability (environmental impairment liability) policy designed for pollution cleanup and third-party claims

Explanation: Because the CGL excludes pollution claims, a business needing environmental liability protection must buy a special pollution liability policy - often called environmental impairment liability coverage - which covers cleanup costs and third-party bodily injury and property damage from pollution incidents. Raising CGL limits cannot buy back an excluded exposure, and guaranty funds only back up insolvent insurers.