Wisconsin Property & Casualty Insurance Practice Exam Free - 2026

• A. No; midterm cancellation requires one of the statutory grounds regardless of policy age
• B. Yes; a new policy in effect less than 60 days may be canceled for any reason with at least 10 days' written notice
• C. Yes, but only with 60 days' notice
• D. Yes, but only if the insured consents in writing

Correct answer: B. Yes; a new policy in effect less than 60 days may be canceled for any reason with at least 10 days' written notice

Explanation: The restrictive midterm-cancellation grounds do not apply to a policy that has not been previously renewed and has been in effect less than 60 days when the notice is mailed or delivered; such a policy may be canceled with at least 10 days' written notice, and the renewal-notice subsections do not apply. Because the notice is sent within 60 days of March 1, the insurer may cancel. The statutory grounds limit cancellations only after the 60-day window, 60 days' notice is the nonrenewal standard, and insured consent is not required. See Wis. Stat. § 631.36(2)(c).

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

Correct answer: D. At least 60 days before expiration

Explanation: A policyholder has the right to renew on the insurer's then-current terms unless, at least 60 days before the expiration date, a notice of intention not to renew is mailed or delivered. 10 days is the minimum cancellation notice, 45 days is the personal-lines notice period for renewal on altered terms, and 30 days is not a Wisconsin nonrenewal period. See Wis. Stat. § 631.36(4)(a).

• A. On October 1, because notice was given before the renewal date
• B. Never; the insurer must renew on the old terms for another full term
• C. 45 days after the notice is mailed, and the insured may cancel during that 45-day period
• D. 60 days after the notice is mailed, and the insured may cancel during that 60-day period

Correct answer: C. 45 days after the notice is mailed, and the insured may cancel during that 45-day period

Explanation: For personal lines property and casualty policies, less favorable terms or higher premiums take effect on the renewal date only if notice was sent at least 45 days before renewal. If notice is given within the 45 days, the new terms do not take effect until 45 days after the notice is mailed, and the policyholder may cancel the renewal at any time during that 45-day period. The 60-day version applies to non-personal-lines policies; the 'renew on old terms' consequence applies only if no notice is given before renewal; and the 25-percent exception does not apply because this increase is 40 percent and includes a coverage change. See Wis. Stat. § 631.36(5)(a)2. and (5)(b).

• A. No; late proof furnished as soon as reasonably possible and within one year does not reduce the claim unless the insurer was prejudiced and the deadline was reasonably possible to meet
• B. Yes; policy time limits are strictly enforced in Wisconsin
• C. No, but the insurer may reduce the claim by 10 percent for each month of delay
• D. Yes, unless the insured obtains a court order excusing the delay

Correct answer: A. No; late proof furnished as soon as reasonably possible and within one year does not reduce the claim unless the insurer was prejudiced and the deadline was reasonably possible to meet

Explanation: If notice or proof of loss is furnished as soon as reasonably possible and within one year after the policy deadline, failure to meet the policy's time limit does not invalidate or reduce the claim unless the insurer is prejudiced and it was reasonably possible to meet the deadline. Here the insurer shows no prejudice and hospitalization made compliance impracticable. Wisconsin does not strictly enforce such limits, authorizes no percentage reduction, and requires no court order. See Wis. Stat. § 631.81(1).

• A. bind coverage until the policy is issued
• B. summarize the policy's key terms for the insured
• C. record the insured's premium payment history
• D. add to, remove, or change policy terms

Correct answer: D. add to, remove, or change policy terms

Explanation: An endorsement modifies the insurance contract by changing coverage, limits, exclusions, or conditions.

• A. Freezes the premium for three years
• B. Automatically increases the building coverage limit by a set percentage over time
• C. Waives the deductible during periods of high inflation
• D. Converts the policy from replacement cost to actual cash value

Correct answer: B. Automatically increases the building coverage limit by a set percentage over time

Explanation: Construction costs rise, and a limit that was adequate at issue can quietly fall below what rebuilding would cost - inviting a coinsurance penalty. The inflation guard endorsement automatically raises the covered limit by a chosen annual percentage so coverage keeps pace without re-underwriting each year. The premium rises with the limit; deductibles and the valuation basis are unchanged.

• A. names a second party to receive claim payments for damaged property
• B. adds another party as an insured for specified coverage purposes
• C. transfers the policy to a new owner with the insurer's consent
• D. designates a party the insurer agrees not to pursue in subrogation

Correct answer: B. adds another party as an insured for specified coverage purposes

Explanation: Additional insured endorsements extend insured status to another party for certain claims, subject to the endorsement wording.

• A. extends insured status to a specified party for claims arising from the insured's work
• B. agrees to pay a specified party directly before the named insured receives any payment
• C. agrees not to pursue recovery from a specified party after paying a covered loss
• D. gives up its right to cancel the policy while the specified party holds an interest

Correct answer: C. agrees not to pursue recovery from a specified party after paying a covered loss

Explanation: A waiver of subrogation prevents the insurer from seeking recovery from a specified party, when the endorsement applies.

• A. a contractor doing work for the insured under a written agreement
• B. a tenant who occupies part of the insured building under a lease
• C. an employee who is injured while using the insured's equipment
• D. a lender or other party with a financial interest in covered property

Correct answer: D. a lender or other party with a financial interest in covered property

Explanation: A loss payable clause can give a lender or other interested party rights to claim payments involving covered property.

• A. endorsement wording can change the meaning of coverage, limits, and exclusions
• B. the base policy wording overrides any endorsement that conflicts with it
• C. endorsements expire at the first renewal unless they are re-signed
• D. endorsements bind the insurer but do not bind the insured who accepted them

Correct answer: A. endorsement wording can change the meaning of coverage, limits, and exclusions

Explanation: An endorsement is part of the policy and can significantly broaden, restrict, or clarify coverage.

• A. the cause of loss is not specifically listed as excluded
• B. the cause of loss is specifically listed as covered
• C. the loss exceeds the deductible stated in the schedule
• D. the cause of loss is both sudden and accidental in nature

Correct answer: B. the cause of loss is specifically listed as covered

Explanation: Named perils coverage applies only to causes of loss named in the policy or endorsement.

• A. They must be attached at policy inception and cannot be added during the term.
• B. They broaden coverage but are not permitted to add exclusions.
• C. They should be read because they can change the original policy wording.
• D. They require a separate premium and a separate policy number.

Correct answer: C. They should be read because they can change the original policy wording.

Explanation: Endorsements are contractual changes and should be read together with the policy.