Property and Casualty Insurance Exam study guide

If you’re preparing for the Property and Casualty Insurance Exam, you’re taking the first step toward a rewarding career in the insurance industry, one that offers both financial stability and the opportunity to make a real impact. Whether you’re new to property and casualty insurance or seeking an additional insurance license, passing the P&C insurance exam is needed to sell related products.

A well-structured study guide, complete with effective advice on preparation strategies, can be the key to your success. Below, you’ll find a comprehensive resource for mastering the property and casualty insurance exam and advancing your career.

What is the Property and Casualty Insurance Exam?

The property and casualty insurance exam is a main requirement in most states for professionals aiming to sell or service property and casualty insurance products. Achieving a P&C insurance license allows you to advise clients on a variety of policies, including:

• Auto insurance
• Homeowners’ and renters’ insurance
• Commercial property and liability coverage
• Workers’ compensation
• Umbrella insurance policies

Generally, the P&C insurance exam is administered by leading testing providers like Pearson VUE and Prometric. This licensing exam typically features two core sections: one covering general national property and casualty insurance content, and another focused on state-specific insurance regulations. Understanding these components will help you create a focused and effective study plan.

How many questions are on the property and casualty insurance exam?

Each state’s P&C exam is slightly different, but you can generally expect each exam to be structured in the following way:

• 100 - 150 questions
• 2 - 4 hours to complete
• The passing score is around 70%
• The exam fee is typically between $30 - $130

The study guide outlines the main topics covered on the exam below.

How to use this study guide

This study guide is organized around the core sections of the exam, helping you:

• Understand the topics most commonly tested
• Focus your time on high-value material
• Build a strategy for long-term retention and exam readiness

We’ll cover:

1. Insurance principles and regulations
2. Property insurance
3. Casualty (liability) insurance
4. Policy provisions and endorsements
5. State-specific laws and regulations
6. Study strategies that work

Use this as your “property and casualty insurance exam cheat sheet” to help guide your studying.

1. Insurance principles and regulations

This foundational section introduces the structure of the insurance industry and the basic legal principles that govern it. Key concepts include:

• Risk management: Understanding risk, peril, hazard, and loss
• Types of insurance funds: Stock vs. mutual, admitted vs. non-admitted, tax-deferred, and domestic/foreign/alien classifications
• Contract law basics: Elements like offer, acceptance, consideration, and legal purpose
• Regulatory oversight: Role of the state insurance department, the National Association of Insurance Commissioners (NAIC), and producer licensing
• Ethics and responsibilities: fiduciary duty, privacy laws, anti-fraud requirements

Mastering this section ensures a thorough understanding of the legal and operational framework underlying every insurance transaction.

2. Property insurance

This section focuses on protecting physical assets, including homes, buildings, and personal belongings. You’ll need to understand:

• Homeowners policies (HO-1 through HO-8)
• Dwelling property policies (DP-1, DP-2, DP-3)
• Commercial property insurance and business policies (BOPs)
• Causes of loss forms: basic, broad, and special
• Loss settlement methods: actual cash value (ACV) vs. replacement cost

It’s also important to know how endorsements can modify coverage and how claims are evaluated.

3. Casualty (liability) insurance

Casualty insurance is a vital component of property and casualty insurance, providing protection for individuals and businesses against liability for injuries or damages they may cause to others. Key study topics within property and casualty insurance include:

• Personal auto policy (PAP) structure and coverage under property and casualty insurance
• Commercial general liability (CGL) and professional liability as part of property and casualty insurance policies
• Workers’ compensation laws and benefits are included in property and casualty insurance offerings
• Commercial auto, garage, and trucker coverage within property and casualty insurance
• Negligence and legal liability concepts relevant to property and casualty insurance claims
• Split versus combined liability limits in property and casualty insurance policies

Thorough comprehension of liability exposures, coverage exclusions, and real-world claims scenarios is essential for mastering property and casualty insurance concepts and successfully answering questions in this section.

4. Policy provisions and endorsements

This portion assesses your understanding of how policies are structured and how they can be personalized. Focus areas include:

• Standard policy sections: Declarations, insuring agreements, conditions, exclusions
• Common endorsements: Ordinance or law, inflation guard, additional insured
• Claim procedures: Notification, proof of loss, settlement practices
• Policy cancellation and nonrenewal rules
• Deductibles, coinsurance, and coverage limits

Many questions are scenario-based, requiring you to apply provisions to practical examples.

5. State-specific laws and regulations

Every state applies its own unique set of insurance license regulations that you must understand to pass your insurance license exam. These requirements are generally emphasized in the second section of your examination. As you prepare, make sure to thoroughly study:

• Your state’s minimum coverage requirements for each type of insurance
• Insurance license and continuing education requirements set by your state
• State laws regarding unfair claims practices and trade regulations
• Specific rules for cancellation and nonrenewal within your state
• State guaranty association procedures and protections applicable to insurance license holders

Consult your state’s official candidate handbook and insurance license exam outline to effectively review all relevant material.

6. Study strategies that work

Studying for the P&C exam requires more than just reading a textbook. Use these strategies to reinforce your learning:

Break topics into manageable sections

Study in 25- to 45-minute blocks and rotate subjects to avoid burnout.

Use practice exams frequently

Simulated exams reinforce learning, identify weak spots, and help you build test-day confidence.

Tip: Ensure you seek out high-quality, accurate property and casualty insurance practice exams from trusted sources.

Apply real-world examples

Understanding how policies work in real scenarios helps you remember details more effectively.

Don’t neglect math

You’ll need to be comfortable calculating premiums, loss ratios, coinsurance penalties, and other relevant factors.

Review consistently

Spaced repetition over several weeks is more effective than cramming in a few days.

Conclusion

The Property & Casualty licensing exam, also known as the P&C insurance exam, can feel overwhelming at first. However, with a focused property and casualty exam study guide and the right preparation strategies, earning your property and casualty insurance license becomes much more manageable. Instead of simply memorizing terms, prioritize understanding key insurance concepts and practice applying your knowledge to real-world scenarios and case-based examples.