Free Property and Casualty Insurance Basics Practice Questions
New Mexico Property & Casualty exam (series 18-31) — 101 practice questions.
Subtopics: Cancellation notice, Certificate of insurance, Loss control, Notice of claim, Cancellation for nonpayment, New policy cancellation, Midterm cancellation, Cancellation notice delivery, Cancellation reasons immunity, Binders, Insurable interest, Certificates of insurance, Guaranty association, Surplus lines, Rate standards, Credit-based insurance scores, Credit score updates, Comparative negligence, Loss valuation, Coinsurance, Negligence, Damages, Types of loss, Insurer provisions, Other insurance, Liability, Limits of liability, Deductibles, Policy structure, Policy conditions, Actual cash value, Replacement cost, Pair and set clause, Vacancy provision, Mortgagee rights, Appraisal condition, Proof of loss, Salvage and abandonment, Liberalization clause, Assignment condition, Binder, Sublimit, Named perils vs open perils, Burden of proof, Direct vs indirect loss, Strict liability, Vicarious liability, Punitive damages, Special vs general damages, Proximate cause, Absolute liability, Hold harmless, Bailee liability, Attractive nuisance, Res ipsa loquitur, Coinsurance calculation, Actual cash value calculation, Split limits application, Underwriting, Loss ratio, Insureds, Cancellation, Policy territory, No benefit to bailee, Duty to defend, Premium audit, Claim settlement, Appraisal, Duties after loss, Abandonment, Retrospective rating, Class rating, Judgment rating
Read the Property and Casualty Insurance Basics study guide
Sample questions & answers
1. Under New Mexico law, when an insurer cancels a commercial property policy midterm, it must give the named insured:
Advance written notice of the cancellation
The cancellation statute requires written notice to the named insured before the effective date (at least ten days for nonpayment or within the first sixty days).
2. A certificate of insurance issued for a New Mexico business is best described as:
Evidence summarizing existing coverage for a third party
New Mexico defines a certificate of insurance as a document evidencing property or casualty coverage; it is not a policy and does not amend, extend or alter coverage.
3. A loss control (risk management) recommendation for a New Mexico business is intended to:
Reduce the frequency or severity of losses
Loss control measures aim to reduce the frequency or severity of losses, benefiting both insurer and insured.
4. A New Mexico commercial insured should report a liability claim to the insurer:
As soon as practicable after it occurs
Policies require the insured to give notice of a claim or occurrence promptly so the insurer can investigate and respond.
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Practice: Property and Casualty Insurance Basics
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
