Vermont Property & Casualty Insurance Practice Exam Free - 2026

• A. $300,000
• B. The full $800,000
• C. $100,000
• D. $500,000

Correct answer: D. $500,000

Explanation: 8 V.S.A. § 3615(a)(1) limits the Association's obligation to the amount of each covered claim that is less than $500,000 (unless it arises under a workers' compensation policy, which is paid in full), and never more than the insolvent insurer's obligation under the policy. The full $800,000 (B) exceeds the cap; $300,000 (A) and $100,000 (C) are life and health guaranty association limits under § 4173, not P&C limits. See 8 V.S.A. § 3615.

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

Correct answer: A. At least 45 days

Explanation: 21 V.S.A. § 696 provides that a workers' compensation policy may not be cancelled before expiration until at least 45 days after a notice of intention to cancel has been filed with the Commissioner and provided to the employer by certified mail; § 697 applies the same 45 days to nonrenewal. Thirty days is not a Vermont WC period, and 10 and 15 days are the short notice periods for nonpayment under the auto and property cancellation statutes, which § 3880 expressly excludes from workers' compensation. See 21 V.S.A. § 696.

• A. Two-thirds of average weekly wages for 9 days only, since the first 3 days are always excluded
• B. Two-thirds of average weekly wages for the whole 12-day period, because the disability lasted 7 consecutive days or more after the third day
• C. Sixty percent of average weekly wages for the whole period
• D. Two-thirds of average weekly wages beginning after a 7-day waiting period

Correct answer: B. Two-thirds of average weekly wages for the whole 12-day period, because the disability lasted 7 consecutive days or more after the third day

Explanation: 21 V.S.A. § 642(a)(1) sets temporary total disability compensation at two-thirds of the employee's average weekly wages, excluding the first three days, but § 642(c)(2) provides that if total disability continues after the third day for seven consecutive calendar days or more, compensation is paid for the whole period. Option A ignores that retroactive rule; C uses a percentage Vermont does not use; D wrongly treats 7 days as a waiting period. See 21 V.S.A. § 642.

• A. Not more than $250 for every day without coverage
• B. Not more than $50 for every day without coverage
• C. Not more than $100 per day for the first seven days and not more than $150 per day thereafter
• D. A flat $500 fine

Correct answer: C. Not more than $100 per day for the first seven days and not more than $150 per day thereafter

Explanation: 21 V.S.A. § 692(a) provides that an employer that failed to comply with § 687 shall be assessed not more than $100 for every day for the first seven days and not more than $150 for every day thereafter. The $250-per-day figure (A) is the additional penalty under § 692(b) after a stop-work order is issued; $50 per day is not in the statute; the $500 fine (D) is the § 699 penalty for deducting insurance costs from employees' wages. See 21 V.S.A. § 692.

• A. Personal inland marine coverage
• B. Homeowners liability coverage
• C. A life insurance rider
• D. Commercial auto coverage

Correct answer: D. Commercial auto coverage

Explanation: Commercial auto coverage addresses business vehicle liability and physical damage needs, depending on the selected forms and symbols.

• A. show which categories of autos are covered for a coverage
• B. identify each covered auto by its vehicle identification number
• C. assign a rating classification based on vehicle size and use
• D. indicate the physical damage deductible that applies to each auto

Correct answer: A. show which categories of autos are covered for a coverage

Explanation: Covered auto symbols indicate which types of autos apply to each coverage, such as owned, hired, or nonowned autos.

• A. ocean marine liability
• B. nonowned auto liability
• C. workers compensation medical-only benefits
• D. equipment breakdown spoilage

Correct answer: B. nonowned auto liability

Explanation: Nonowned auto liability can address the employer's liability exposure when employees use personally owned vehicles for business purposes.

• A. uses only as employee personal property
• B. owns and lists as inventory only
• C. leases, rents, hires, or borrows
• D. sells to customers after repairs

Correct answer: C. leases, rents, hires, or borrows

Explanation: Hired auto coverage applies to autos the business leases, hires, rents, or borrows, subject to the policy terms.

• A. to cover physical damage to vehicles the business rents for short periods
• B. to protect employees' personal auto policies from being cancelled after a loss
• C. to cover vehicles the business owns but has not yet listed on the schedule
• D. to address rented vehicles and employee-owned vehicles used for business

Correct answer: D. to address rented vehicles and employee-owned vehicles used for business

Explanation: Hired auto coverage addresses rented or borrowed autos, while nonowned auto coverage addresses vehicles the business does not own, such as employee vehicles used for business.

• A. loss to covered autos themselves
• B. dishonest acts by partners only
• C. injury to employees covered by workers compensation
• D. loss of business income from all causes

Correct answer: A. loss to covered autos themselves

Explanation: Commercial auto physical damage coverage helps pay for damage to covered vehicles, depending on selected causes of loss and deductibles.

• A. collision and comprehensive damage to the insured's own covered autos regardless of which driver caused the accident
• B. bodily injury or property damage the insured is legally responsible for because of a covered auto accident
• C. medical expenses for the insured's employees injured while driving a covered auto on company business
• D. bodily injury to the insured's driver caused by an at-fault motorist who carries no liability insurance

Correct answer: B. bodily injury or property damage the insured is legally responsible for because of a covered auto accident

Explanation: Auto liability coverage addresses covered legal liability arising from auto accidents. It does not pay for damage to the insured's own autos, employee injuries, or losses caused by uninsured drivers, which require physical damage, workers compensation, or uninsured motorists coverage.

• A. collision damage to the business's own truck
• B. injury to a pedestrian struck by a truck
• C. damage to a parked car hit by a truck
• D. attorney fees to defend a covered lawsuit

Correct answer: A. collision damage to the business's own truck

Explanation: Liability coverage protects against covered third-party claims. Damage to the insured's own vehicle usually requires physical damage coverage.