South Dakota Property & Casualty Insurance Practice Exam Free - 2026

• A. Class 1 misdemeanor; civil penalty up to $1,000
• B. Class 2 misdemeanor; civil penalty up to $2,500
• C. Class 4 felony because the amount is $1,000 or more; civil penalty not to exceed $5,000 for a first violation
• D. Class 6 felony; civil penalty not to exceed $25,000

Correct answer: C. Class 4 felony because the amount is $1,000 or more; civil penalty not to exceed $5,000 for a first violation

Explanation: Knowingly presenting a claim statement containing false, incomplete or misleading material information is a fraudulent insurance act; a violation involving $400 or less is a Class 2 misdemeanor, more than $400 but less than $1,000 is a Class 1 misdemeanor, and $1,000 or greater is a Class 4 felony, so a $1,400 false claim is a Class 4 felony (SDCL 58-33-37 uses the same tiers for false claims). Under SDCL 58-4A-7 a person found in a civil action to have committed a fraudulent insurance act is subject to a civil penalty not exceeding $5,000 for the first violation, $10,000 for the second and $15,000 for each subsequent violation, in lieu of criminal prosecution. A, B and D misstate the felony class and the penalty tiers; $25,000 is the maximum administrative penalty against an insurer under SDCL 58-4-28.1. See SDCL 58-4A-2.

• A. $25,000 per person / $50,000 per accident for bodily injury and $15,000 property damage
• B. $50,000 per person / $100,000 per accident for bodily injury and $25,000 property damage
• C. $25,000 per person / $50,000 per accident for bodily injury and $25,000 property damage
• D. $30,000 per person / $60,000 per accident for bodily injury and $25,000 property damage

Correct answer: C. $25,000 per person / $50,000 per accident for bodily injury and $25,000 property damage

Explanation: An owner's policy of liability insurance must provide limits of twenty-five thousand dollars for bodily injury to or death of one person in any one accident, subject to that limit fifty thousand dollars for bodily injury to or death of two or more persons in one accident, and twenty-five thousand dollars for injury to or destruction of property of others in any one accident. A understates property damage, and B and D use bodily injury figures that are not South Dakota's minimums. See SDCL 32-35-70.

• A. The insurer must include uninsured motorist bodily injury coverage in limits equal to the policy's bodily injury liability limits; the coverage cannot be omitted, though it need not exceed $100,000/$300,000 unless the insured requests more
• B. The insured may reject uninsured motorist coverage in writing
• C. Uninsured motorist coverage need only be offered at the 25/50 minimum limits
• D. Uninsured motorist coverage is optional for policies with limits above the statutory minimum

Correct answer: A. The insurer must include uninsured motorist bodily injury coverage in limits equal to the policy's bodily injury liability limits; the coverage cannot be omitted, though it need not exceed $100,000/$300,000 unless the insured requests more

Explanation: No auto liability policy may be delivered or issued for delivery in South Dakota for a vehicle registered or principally garaged in the state unless it provides uninsured motorist and hit-and-run coverage for bodily injury or death in limits equal to the policy's bodily injury liability coverage; the required coverage need not exceed $100,000 per person and $300,000 per accident unless the insured requests additional coverage, and only government-owned vehicles are exempt. B, C and D describe rejection or reduced-limit options that the statute does not allow. See SDCL 58-11-9.

• A. None; underinsured motorist coverage is optional and must only be offered
• B. $25,000/$50,000, the financial responsibility minimums
• C. $100,000/$300,000, the statutory maximum
• D. Coverage at a face amount equal to the policy's bodily injury limits, $50,000/$100,000

Correct answer: D. Coverage at a face amount equal to the policy's bodily injury limits, $50,000/$100,000

Explanation: No motor vehicle liability policy may be issued or delivered in South Dakota for a vehicle registered or principally garaged in the state unless underinsured motorist coverage is provided at a face amount equal to the bodily injury limits of the policy, although the required coverage need not exceed $100,000 per person and $300,000 per accident unless the insured requests more; underinsured coverage pays the insured's uncompensated damages up to those limits less the amount paid by the at-fault driver's liability insurer (SDCL 58-11-9.5). A is wrong because the coverage is mandatory, not merely offered; B and D substitute the wrong limits. See SDCL 58-11-9.4.

• A. A deductible
• B. A covered auto only
• C. A written insurance application
• D. A breach of a legal duty

Correct answer: D. A breach of a legal duty

Explanation: Negligence usually requires duty, breach of duty, causation, and damages. A breach of duty is one of the key elements.

• A. Compensatory damages
• B. Symbolic damages only
• C. Punitive damages
• D. Speculative damages

Correct answer: A. Compensatory damages

Explanation: Compensatory damages are designed to compensate for actual covered loss, such as medical bills, property damage, lost wages, or pain and suffering.

• A. Reimburse the plaintiff's medical bills, lost wages, and repair costs
• B. Punish especially wrongful conduct and deter similar behavior
• C. Compensate the plaintiff for pain, suffering, and loss of enjoyment of life
• D. Reimburse the plaintiff's attorney fees and court costs after a verdict

Correct answer: B. Punish especially wrongful conduct and deter similar behavior

Explanation: Punitive damages are meant to punish and deter especially wrongful conduct. Whether insurance can cover them depends on policy language and applicable law.

• A. The maximum the policy will pay for any single covered occurrence during the policy period
• B. The maximum the policy will pay to any one injured person in a single covered accident
• C. The total maximum the policy will pay for all covered claims during a policy period
• D. The amount the insured must pay on each claim before the policy begins to pay

Correct answer: C. The total maximum the policy will pay for all covered claims during a policy period

Explanation: An aggregate limit is the total amount a policy will pay for specified covered claims during a policy period, subject to the policy wording.

• A. The total payable for all claims during the policy period
• B. The maximum payable to any one person injured in an event
• C. The amount the insured retains before the policy pays
• D. The maximum payable for one covered event or occurrence

Correct answer: D. The maximum payable for one covered event or occurrence

Explanation: An occurrence limit is the maximum amount payable for one covered occurrence, subject to other limits such as aggregate limits.

• A. Extra liability coverage above underlying policies
• B. Broader property coverage for high-value homes
• C. Primary liability coverage that replaces auto and home policies
• D. Excess medical payments coverage for household members

Correct answer: A. Extra liability coverage above underlying policies

Explanation: An umbrella policy can provide additional liability limits above required underlying policies and may provide broader liability coverage in some situations.

• A. The insured's computer is stolen from home
• B. The insured's guest slips on the insured's icy steps and is injured
• C. The insured's garage is damaged by wind
• D. The insured's roof is damaged by hail

Correct answer: B. The insured's guest slips on the insured's icy steps and is injured

Explanation: A guest injury may create a liability claim if the insured is alleged to be legally responsible. Damage to the insured's own property is usually a first-party property issue.

• A. The business's legal liability for injuries to customers on its premises
• B. Employees' medical bills and lost wages after injuries suffered on the job
• C. Business-owned buildings and business personal property against covered causes of loss
• D. Business-owned vehicles, trucks, and trailers against collision and other-than-collision losses

Correct answer: C. Business-owned buildings and business personal property against covered causes of loss

Explanation: Commercial property insurance generally covers business buildings, business personal property, and related property exposures against covered causes of loss.