Free MO-PC Practice Questions

Question 1

A sudden accidental event damages both an owner-occupied dwelling and its contents. The cause is not excluded, but it is not among the broad-form named perils. Under unendorsed HO-3 and HO-5 forms, how do the two policies respond?

Accepted Answer

The HO-3 covers the dwelling only; the HO-5 covers both dwelling and contents

Answer

Both forms cover the dwelling damage but exclude the contents damage

Answer

The HO-3 covers both losses; the HO-5 covers only the dwelling loss

Answer

Neither form responds because any cause omitted from the broad-form named-peril list is excluded

Question 2

A covered fire closes a bakery for one month. Without the fire, the bakery would have earned $18,000 in net income. It continues $12,000 of normal operating expenses and earns $3,000 in net income from limited online sales. It also spends $4,000 on a temporary kitchen that qualifies as Extra Expense. Ignoring waiting periods and limits, what amount belongs to Business Income rather than Extra Expense?

Accepted Answer

$27,000, with the temporary-kitchen cost handled under Extra Expense

Answer

$23,000, after subtracting both online income and the temporary-kitchen cost

Answer

$31,000, including the temporary-kitchen cost with lost income

Answer

$33,000, because income earned during the shutdown does not reduce the loss

Question 3

An NFIP policy covers a single-family principal residence for 90% of its full replacement cost. A covered flood damages both the building and the insured's household contents. Disregarding deductibles and limits, which valuation pairing governs the settlement?

Accepted Answer

Replacement cost for the building and actual cash value for the contents

Answer

Replacement cost for both the building and the household contents

Answer

Actual cash value for the building and replacement cost for the contents

Answer

Market value for the building and stated value for the household contents

Question 4

At the time of loss, a warehouse is worth $1,000,000 and is subject to an 80% coinsurance requirement. The insured carries a $600,000 limit, sustains a $200,000 covered loss, and has a $5,000 deductible. No other limit applies. What amount is payable after applying coinsurance and the deductible?

Accepted Answer

$145,000, applying the coinsurance ratio before subtracting the deductible

Answer

$195,000, because only the deductible reduces the covered loss

Answer

$150,000, because the coinsurance result is calculated before and not reduced by the deductible

Answer

$115,000, comparing the carried limit with the property's full value

Question 5

A windstorm tears an opening in a store's roof. Rain entering through that opening damages inventory, and the store closes during repairs. The policy covers windstorm, rain entering through a wind-created opening, and business income. Which classification accurately describes the losses?

Accepted Answer

Roof and stock damage are direct physical losses; lost income is an indirect loss

Answer

Roof damage is direct; inventory damage and lost income are indirect losses

Answer

All three losses are direct because they arose from the same wind-created opening and proximate cause

Answer

Roof and stock damage are indirect; lost income is direct

Question 6

A homeowner intentionally sets fire to the insured house. The lender is listed under a standard mortgage clause, had no knowledge of the act, and satisfies its duties regarding premium, proof of loss, and known changes in hazard. What outcome should be expected?

Accepted Answer

The lender may recover its protected interest even though the homeowner's claim is barred

Answer

Both claims are barred because the homeowner's act is attributed to every interest

Answer

Both claims are payable because the mortgage clause removes the intentional-loss exclusion

Answer

The lender can recover only if the homeowner is acquitted of criminal charges

Question 7

A standard claims-made CGL policy runs from January 1 through December 31, 2025, with a January 1, 2023 retroactive date. An injury occurs in October 2025. The insured reports the occurrence to the insurer on January 20, 2026, and the claimant first makes a claim in April 2028. No later policy covers the claim. How does the Basic ERP affect this claim?

Accepted Answer

The claim may qualify under the five-year Basic ERP because the occurrence was timely reported

Answer

The claim is outside coverage because every postexpiration claim must be made within 60 days

Answer

The claim is barred because an occurrence must be reported before the claims-made policy expires

Answer

Only an occurrence policy can respond when a claimant waits more than one year to make a claim

Question 8

An auto repair business rents a cargo van for a week to pick up parts and also has customers' automobiles in its custody for service. Its Business Auto declarations use specifically tailored symbols rather than Symbol 1. Which coverage combination addresses both exposures?

Accepted Answer

Symbol 8 for the rented van and garagekeepers coverage for customers' automobiles

Answer

Symbol 9 for the rented van and CGL coverage for customers' automobiles

Answer

Symbol 7 for the rented van and Business Personal Property coverage for customers' automobiles

Answer

Symbol 2 for the rented van and commercial property coverage for customers' automobiles

Question 9

A manufacturer has $2,400,000 of payroll subject to rating, a workers compensation rate of $2.50 per $100 of payroll, and an experience modification factor of 0.78. Ignoring taxes and other charges, what are the modified premium and the effect of the factor?

Accepted Answer

$46,800; the 0.78 modifier reduces the manual premium by 22%

Answer

$60,000; the modifier is only a loss-control score and does not change premium

Answer

$76,923; the manual premium is divided by the experience modifier

Answer

$106,800; the modifier is added rather than multiplied

Question 10

A general contractor receives a certificate of insurance naming it as an additional insured under a subcontractor's CGL policy. The issued policy contains no endorsement granting that status. After a liability claim, what legal effect does the certificate have?

Accepted Answer

It is evidence of insurance only; an endorsement is needed to change coverage

Answer

It creates additional-insured status because an authorized producer issued it

Answer

It guarantees advance cancellation notice even when the policy grants none

Answer

It overrides conflicting exclusions because the certificate is the later document

Free MO-PC Practice Questions

Domain 1: Property and Casualty Insurance General Knowledge

Question 1

Question 2

Question 3

Domain 2: Missouri-Specific Property and Casualty Laws and Regulations

Question 4

Question 5

More MO-PC practice questions

Question 6

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Question 8

Question 9

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