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Pearson VUE: Casualty Insurance
Practice Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is the primary purpose of casualty insurance?
- To insure physical damage to a building
- To cover damage caused by natural disasters
- To pay for personal health care costs
✔✔ B. To provide liability coverage for bodily injury and property damage
Which of the following best describes liability insurance?
- Insurance that covers your personal injuries
- Insurance that pays for lost wages
- Insurance for flood and earthquake losses
✔✔ B. Insurance that covers damages you cause to others
What does a split limit in auto liability insurance refer to?
- A combined amount for all claims 1 / 4
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✔✔ B. Separate limits for bodily injury per person, per accident, and property damage
- A limit that increases after a deductible is met
- A single dollar amount covering all losses
Which policy would provide coverage if a customer slips and falls in a store?
- Professional liability
- Umbrella insurance
- Product liability
✔✔ B. General liability
What does the term “negligence” mean in casualty insurance?✔✔ A. Failure to use reasonable care resulting in damage or injury
- Intentional harm to another person
- Failure to pay premiums on time
- Misrepresenting policy information
Which of the following would be covered under an employer’s workers' compensation policy?✔✔ A. An employee injured while lifting heavy boxes on the job 2 / 4
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- A customer falling in the parking lot
- A fire damaging office furniture
- An executive losing personal items at work
What is an umbrella liability policy?
- A policy that covers physical damage only
- A policy that replaces health insurance
- A policy that covers only weather-related incidents
✔✔ C. A policy that provides additional coverage above primary liability limits
Which of the following is an example of a third-party claim?✔✔ A. A driver files a claim after causing injury to another person
- A homeowner files a claim for water damage
- A worker files for lost wages
- An insured reports their own stolen vehicle
What is subrogation in casualty insurance?✔✔ A. The insurer’s right to recover damages from a responsible third party 3 / 4
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- The cancellation of a policy before its term
- The process of increasing coverage limits
- The selection of a deductible amount
Which of the following is typically excluded from a general liability policy?
- Bodily injury to a customer
- Damage caused by a defective product
- Medical expenses for injured visitors
✔✔ B. Intentional damage caused by the insured
Under which situation would a commercial auto policy provide coverage?✔✔ A. An employee damages another vehicle while driving the company car
- An employee files for unemployment
- A company’s delivery is delayed
- A worker has their private car stolen at work
What is the purpose of a claims-made liability policy?
- It covers claims regardless of when the event happened
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