Tennessee Property & Casualty Insurance Practice Exam Free - 2026

• A. Improperly using notes or other reference material to complete the licensing examination
• B. Charging a client a consulting fee under a written agreement
• C. Writing a personal auto policy for the producer's own spouse
• D. Representing a domestic insurer and a foreign insurer at the same time

Correct answer: A. Improperly using notes or other reference material to complete the licensing examination

Explanation: The licensing law lists fifteen grounds, including providing incorrect or misleading information on the application, misappropriating money, intentionally misrepresenting contract terms, a felony conviction, license action in another state, forging a name on an application, improperly using notes or reference material on an examination, knowingly accepting business from an unlicensed person, and selling for an unauthorized company. A written fee agreement is permitted, selling to relatives is not restricted, and representing both domestic and foreign insurers is ordinary business. Discipline is governed by the Uniform Administrative Procedures Act with the opportunity for a contested case hearing, and a denied applicant must be notified in writing within 30 days. See Tenn. Code Ann. § 56-6-112(a), (b).

• A. Selling
• B. Negotiating
• C. Adjusting
• D. Soliciting

Correct answer: D. Soliciting

Explanation: To 'solicit' is to attempt to sell insurance or to ask or urge a person to apply for a particular kind of insurance from a particular company. To 'sell' is to exchange a contract of insurance for money or its equivalent on behalf of an insurer, and to 'negotiate' is to confer directly with, or offer advice directly to, a purchaser about the substantive benefits, terms or conditions of a contract. Each activity requires a license: an insurance producer is a person required to be licensed to sell, solicit or negotiate insurance. See Tenn. Code Ann. § 56-6-102.

• A. Each clerk must pass the full property and casualty examination
• B. Travel insurance is a limited line that may be sold under a limited lines producer license, which is issued without the examination required for the major lines
• C. No license of any kind is needed because travel insurance is exempt from regulation
• D. The clerks need a life license because travel policies include accidental death benefits

Correct answer: B. Travel insurance is a limited line that may be sold under a limited lines producer license, which is issued without the examination required for the major lines

Explanation: Tennessee recognizes limited lines of insurance - including travel, credit, mortgage guaranty, crop, portable electronics and self-service storage coverage - that may be sold under a limited lines producer license issued without the written examination required for the major lines. A limited lines producer is a person authorized by the commissioner to sell, solicit or negotiate limited lines insurance. See Tenn. Code Ann. §§ 56-6-102, 56-6-110.

• A. None, because the client chose the insurer
• B. The producer owes only the commission earned on the policy
• C. The producer is personally liable for the unpaid claim and has committed a fraudulent insurance act
• D. The producer must refund the premium but bears no claim liability

Correct answer: C. The producer is personally liable for the unpaid claim and has committed a fraudulent insurance act

Explanation: A person who sells, solicits or negotiates insurance for an insurer that is not authorized to do business in Tennessee is personally liable on the contract for premiums and unpaid claims, and the conduct is a fraudulent insurance act. Selling for an unauthorized company is also a listed ground for license revocation. See Tenn. Code Ann. §§ 56-6-114, 56-6-112(a).

• A. Increase loss risk and restrict or reduce coverage under policy conditions
• B. Trigger an automatic premium refund for each month the building sits unoccupied
• C. Void the policy immediately on the first day the building becomes vacant
• D. Shift the coinsurance requirement from the insured to the mortgageholder

Correct answer: A. Increase loss risk and restrict or reduce coverage under policy conditions

Explanation: Vacancy can increase risk of certain losses. Commercial property policies often include vacancy conditions that may limit or restrict coverage after a specified vacancy period.

• A. Share every covered loss with the insurer on a fixed percentage basis
• B. Carry insurance close to the required percentage of the property's value
• C. Insure the property for its full market value rather than replacement cost
• D. Select the highest available deductible to keep premiums as low as possible

Correct answer: B. Carry insurance close to the required percentage of the property's value

Explanation: A coinsurance clause encourages adequate insurance-to-value. If the insured carries too little insurance, a coinsurance penalty may reduce a partial-loss payment.

• A. Professional liability for errors, omissions, and negligent advice by the insured in its trade or occupation
• B. Direct physical damage to the insured's own buildings, business personal property, and stock from covered perils
• C. Business liability for covered bodily injury, property damage, and certain personal and advertising injury claims
• D. Liability for bodily injury to the insured's own employees arising out of and in the course of their employment

Correct answer: C. Business liability for covered bodily injury, property damage, and certain personal and advertising injury claims

Explanation: CGL coverage generally addresses common business liability exposures, including covered bodily injury, property damage, and personal and advertising injury claims.

• A. Personal and advertising injury liability
• B. Medical payments regardless of fault
• C. Damage to the insured's own premises and stock
• D. Bodily injury and property damage liability

Correct answer: D. Bodily injury and property damage liability

Explanation: Coverage A of a CGL policy generally covers bodily injury and property damage liability, subject to definitions, exclusions, and conditions.

• A. Personal and advertising injury liability
• B. Bodily injury and property damage liability
• C. Medical payments without regard to fault
• D. Products-completed operations liability

Correct answer: A. Personal and advertising injury liability

Explanation: Coverage B of a CGL policy generally applies to personal and advertising injury liability, such as certain covered offenses listed in the policy.

• A. Medical payments for the insured's own employees injured on the premises
• B. Medical payments for certain injuries without regard to legal liability
• C. Defense costs for personal and advertising injury suits within the limits
• D. Bodily injury damages the insured becomes legally obligated to pay to others

Correct answer: B. Medical payments for certain injuries without regard to legal liability

Explanation: Coverage C generally provides limited medical payments for certain injuries on or near the insured premises or because of the insured's operations, regardless of fault.

• A. A customer trips over stock while shopping inside the insured's store
• B. A defective product must be withdrawn from the market before anyone is hurt
• C. A product sold by the insured injures a customer after the sale
• D. A subcontractor damages a client's floor while work is still in progress

Correct answer: C. A product sold by the insured injures a customer after the sale

Explanation: Products-completed operations coverage can apply to covered liability arising from the insured's products or completed work after the product or work has left the insured's control.

• A. Liability arising from the insured's products after they have left its hands
• B. Direct damage to the insured's own building and contents at the described premises
• C. Liability for injuries to the insured's employees while working on the premises
• D. Liability arising from the insured's premises or ongoing business operations

Correct answer: D. Liability arising from the insured's premises or ongoing business operations

Explanation: Premises and operations coverage addresses covered liability arising from the insured's location or ongoing operations, subject to policy exclusions and conditions.