Property and Casualty Insurance Exam Cheat Sheet: Forms, Coverages, and Formulas
A one-page review of the P&C concepts that show up most on state licensing exams.
What’s covered: State P&C producer exams test insurance basics, personal lines (homeowners and auto), commercial lines, and your state’s laws. This property and casualty insurance exam cheat sheet focuses on the general concepts and forms that appear on most states’ exams.
P&C exams are known for form numbers and coverage details. A clear property and casualty insurance exam cheat sheet helps you keep HO forms, auto coverages, and commercial policies straight.
Insurance Basics
- Peril vs. hazard: A peril causes a loss (fire, theft). A hazard increases the chance of loss (physical, moral, or morale).
- Named perils vs. open perils: Named covers only listed perils; open (special) covers everything not excluded.
- Elements of a contract: Offer and acceptance, consideration, competent parties, legal purpose.
- Indemnity: Insurance restores you to your pre-loss position — no profit from a loss.
- Subrogation: After paying a claim, the insurer can pursue the at-fault party.
Property and Casualty Insurance Exam Cheat Sheet: Homeowners Forms
| Form | Who it’s for | Dwelling coverage | Personal property |
|---|---|---|---|
| HO-2 (Broad) | Homeowners | Named perils (broad) | Named perils (broad) |
| HO-3 (Special) | Homeowners | Open perils | Named perils (broad) |
| HO-4 (Contents) | Renters | None | Named perils (broad) |
| HO-5 (Comprehensive) | Homeowners | Open perils | Open perils |
| HO-6 (Unit owners) | Condo owners | Limited (unit interior) | Named perils (broad) |
| HO-8 (Modified) | Older homes | Named perils (basic) | Named perils (basic) |
Section I coverages: A (Dwelling), B (Other structures), C (Personal property), D (Loss of use). Section II: E (Personal liability), F (Medical payments to others).
Personal Auto Policy (PAP)
| Part | Coverage |
|---|---|
| Part A | Liability (bodily injury and property damage you cause) |
| Part B | Medical payments |
| Part C | Uninsured/underinsured motorists |
| Part D | Damage to your auto (collision and other-than-collision) |
| Part E | Duties after an accident or loss |
| Part F | General provisions |
Commercial Lines
Commercial Package Policy (CPP)
Combines common declarations and conditions with coverage parts such as commercial property, general liability, crime, and inland marine.
Commercial General Liability (CGL)
Coverage A: bodily injury and property damage. Coverage B: personal and advertising injury. Coverage C: medical payments. Know occurrence vs. claims-made forms.
Businessowners Policy (BOP)
A package for small and mid-sized businesses combining property and liability coverage.
Workers’ Compensation
Part One pays statutory benefits for work-related injuries. Part Two (employers liability) covers lawsuits from employees.
Coinsurance and Valuation
- Coinsurance formula: (Insurance carried ÷ insurance required) × loss − deductible = payment.
- Insurance required: Property value × coinsurance percentage (for example, 80%).
- Actual cash value (ACV): Replacement cost minus depreciation.
- Replacement cost: Cost to replace with like kind and quality, without deducting depreciation.
- Agreed value: Value set in advance that suspends the coinsurance clause.
Key Takeaways
- Know the difference between named and open perils.
- Memorize HO-2 through HO-8 and the six homeowners coverages A–F.
- Learn the six parts of the personal auto policy and how split limits work.
- Understand CGL Coverages A–C, BOPs, and workers’ comp.
- Practice the coinsurance formula until it’s automatic.
Frequently Asked Questions
What is on the property and casualty insurance exam?
Most P&C exams cover insurance basics, homeowners and dwelling policies, personal auto, commercial property and liability, workers’ compensation, and your state’s insurance laws.
What is the difference between HO-3 and HO-5?
HO-3 covers the dwelling on an open-perils basis but personal property on a named-perils basis. HO-5 covers both the dwelling and personal property on an open-perils basis.
How do you calculate coinsurance?
Divide the insurance carried by the insurance required (property value times the coinsurance percentage), multiply by the loss, and subtract the deductible.
Can you use notes on the P&C licensing exam?
No. State licensing exams don’t allow personal notes. A cheat sheet is a study tool to help you memorize forms and formulas beforehand.
The Bottom Line
A focused property and casualty insurance exam cheat sheet makes the forms and formulas manageable. Drill the HO forms, auto parts, and coinsurance math, then finish with your state’s rules.
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