Oregon Property & Casualty Insurance Practice Exam Free - 2026

• A. UM limits must always equal the liability limits and cannot be reduced
• B. UM coverage may be rejected entirely in writing
• C. UM limits equal the bodily injury liability limits unless the named insured elects lower limits in writing, but never below the ORS 806.070 minimums
• D. UM limits automatically equal the state minimum unless higher limits are purchased

Correct answer: C. UM limits equal the bodily injury liability limits unless the named insured elects lower limits in writing, but never below the ORS 806.070 minimums

Explanation: ORS 742.502(2)(a) requires a motor vehicle bodily injury liability policy to carry uninsured motorist coverage (which must include underinsurance coverage) at the same limits as the bodily injury liability coverage unless a named insured elects lower limits in writing, and the elected limits may not be below the amounts required by ORS 806.070; subsection (2)(b) requires a signed election statement within 60 days. UM cannot be rejected entirely (B), lower limits are permitted (A is wrong), and the default is the liability limit, not the state minimum (D). See ORS 742.502.

• A. At least 30 days, or at least 10 days for nonpayment of premium, each with the reason stated
• B. At least 45 days, or 20 days for nonpayment
• C. At least 20 days for any reason
• D. At least 60 days, or 30 days for nonpayment

Correct answer: A. At least 30 days, or at least 10 days for nonpayment of premium, each with the reason stated

Explanation: ORS 742.564(1) makes a notice of cancellation effective only if mailed or delivered to the named insured at least 30 days before the effective date, accompanied by a statement of reasons, except that cancellation for nonpayment of premium requires at least 10 days' notice with the reason. The 45/20 (B), 20 (C) and 60/30 (D) combinations are not the Oregon auto cancellation periods. See ORS 742.564.

• A. Cancellation is barred because undisclosed accidents are never a permitted ground
• B. Because the policy has been in effect less than 60 days and is not a renewal, the statutory limits on cancellation grounds do not yet apply
• C. Cancellation is permitted only if the accidents occurred within 180 days before the policy
• D. Cancellation requires the Director's written approval

Correct answer: B. Because the policy has been in effect less than 60 days and is not a renewal, the statutory limits on cancellation grounds do not yet apply

Explanation: ORS 742.562(1) limits mid-term auto cancellation to nonpayment of premium, fraud or material misrepresentation or violation of policy terms, and suspension or revocation of driving privileges during the policy period (or the 180 days before a renewal), but subsection (2) states the section does not apply to a policy in effect less than 60 days when the notice is mailed unless it is a renewal. Material misrepresentation can itself be a ground (A is wrong); the 180-day look-back concerns license suspensions before a renewal, not accidents (C); no Director approval is required (D). See ORS 742.562.

• A. At least 10 days
• B. At least 30 days
• C. At least 45 days
• D. At least 60 days

Correct answer: C. At least 45 days

Explanation: ORS 742.566(2)(a) provides that when an insurer offers, in lieu of renewal, a replacement policy from a different company in the same ownership group, the new terms, rates and provisions take effect on the renewal date only if the insurer sends the insured and any producer notice at least 45 days before the renewal date, including the replacement policy or a description of the differing terms. Ten days (A) is the nonpayment cancellation notice, 30 days (B) is the ordinary nonrenewal notice under subsection (1), and 60 days (D) is not an Oregon auto figure. See ORS 742.566.

• A. Liability for injury or damage arising from ongoing operations at the insured's job site
• B. Liability for injury or damage occurring to customers while visiting the insured's premises
• C. Liability for the cost of recalling or replacing a product that is found to be defective after sale
• D. Liability for injury or damage arising from products sold or work completed away from premises

Correct answer: D. Liability for injury or damage arising from products sold or work completed away from premises

Explanation: Products-completed operations hazard refers to liability for bodily injury or property damage arising from the insured's products after they leave the insured's control or from completed work away from the premises.

• A. Liability coverage for injuries or damage occurring on insured premises or from ongoing operations
• B. Liability coverage for injuries or damage caused by the insured's products after they are sold
• C. Property coverage for damage to the insured's own building and equipment used in its operations
• D. Liability coverage for injuries or damage arising from the insured's work after it is completed

Correct answer: A. Liability coverage for injuries or damage occurring on insured premises or from ongoing operations

Explanation: Premises and operations coverage is part of general liability insurance that covers bodily injury or property damage occurring on the insured's premises or arising from the insured's ongoing business operations.

• A. Coverage for bodily injury to customers caused by a product the insured promoted in its ads
• B. Coverage for offenses like libel, slander, false arrest, and copyright infringement in advertising
• C. Coverage for medical expenses and lost wages after an auto accident regardless of fault
• D. Coverage for the cost of reprinting or rerunning an advertisement that contained a factual error

Correct answer: B. Coverage for offenses like libel, slander, false arrest, and copyright infringement in advertising

Explanation: Personal and advertising injury coverage in CGL policies covers offenses including false arrest, libel, slander, invasion of privacy, and copyright infringement committed in the course of advertising.

• A. The full underlying policy limit
• B. Nothing - the umbrella pays from the first dollar
• C. A self-insured retention (SIR)
• D. Double the homeowners deductible

Correct answer: C. A self-insured retention (SIR)

Explanation: When an umbrella responds to a loss its underlying policies do not cover at all, the insured first pays the self-insured retention - commonly a few hundred to a few thousand dollars. When the umbrella instead sits above an underlying policy that does cover the loss, the underlying policy's limit serves as the attachment point and no retention applies.

• A. Coverage placed with a non-admitted insurer when admitted carriers decline the risk
• B. Coverage that shares each loss proportionally with the insured's primary policy
• C. Coverage that broadens the terms of the underlying policy to fill gaps in protection
• D. Coverage that pays only after underlying policy limits are exhausted

Correct answer: D. Coverage that pays only after underlying policy limits are exhausted

Explanation: Excess liability insurance provides additional limits above an underlying policy but follows the same terms and conditions. Unlike umbrella policies, it typically doesn't broaden coverage.

• A. Liability coverage for vehicles used for business that aren't owned by the insured
• B. Physical damage coverage for vehicles the business leases under a long-term contract
• C. Liability coverage for vehicles the business owns and registers in its own name
• D. Liability coverage for employees' personal vehicles while driven for personal errands

Correct answer: A. Liability coverage for vehicles used for business that aren't owned by the insured

Explanation: Hired and non-owned auto coverage provides liability protection when employees use rented vehicles (hired) or their personal vehicles (non-owned) for business purposes.

• A. Motorcycle insurance
• B. Commercial auto coverage required for businesses transporting goods or passengers for hire
• C. Moving company coverage
• D. Insurance for car carriers

Correct answer: B. Commercial auto coverage required for businesses transporting goods or passengers for hire

Explanation: Motor carrier insurance is specialized commercial auto coverage for trucking companies and other businesses that transport goods or passengers for hire, meeting DOT and state requirements.

• A. Coverage for the truck or vessel itself against physical damage while carrying goods
• B. Liability coverage for a carrier's bodily injury claims arising from its delivery vehicles
• C. Coverage for goods being transported against loss or damage during transit
• D. Coverage for goods stored in the insured's warehouse against fire, theft, and vandalism

Correct answer: C. Coverage for goods being transported against loss or damage during transit

Explanation: Cargo insurance covers goods while being transported from one location to another against loss or damage during transit. It can cover various modes including truck, rail, air, and ocean shipping.