Licensing requirements vary by state. However, one element is consistent throughout the U.S. – you must pass a written examination before your license is approved. While each state’s test will vary, the test contains the same basic framework: evaluation of general insurance knowledge and state-specific knowledge of rules and regulations.
General requirements
All states require license candidates to be at least 18 years old, a valid permit to work in the U.S., pass the state licensing examination, and pay applicable license fees (which are separate from the exam fee). Most states also require candidates to pass a criminal background check and have their fingerprints on file. Some states may require proof of continuing education courses in the selected field and proof of financial responsibility.
Test Design
The Property and Casualty licensing examination is a two-hour, 150-170 (depending on the state) multiple-choice question exam consisting of two parts. The first part consists of questions covering general knowledge of products, terms, and concepts. The second part is state-specific and assesses your knowledge of statutes and regulations. Each section includes non-scored questions that are used to validate future test subjects.
The Property and Casualty general knowledge section includes:
- Types of policies
- Homeowners
- Dwelling
- Commercial
- Inland marine
- National Flood Insurance Program
- Other
- Earthquake
- Mobile Home
- Watercraft
- Farm
- Windstorm
- Insurance terms and related concepts
- Insurance
- Insurable Interest
- Risk
- Hazard
- Peril
- Loss
- Loss Valuation
- Proximate cause
- Deductible
- Indemnity
- Limits of Liability
- Coinsurance/Insurance to value
- Occurrence
- Cancelation
- Non-renewal
- Vacancy and unoccupancy
- Liability
- Negligence
- Binder
- Endorsements
- Blanket vs. Specific
- Policy provisions and Contract Law
- Declarations
- Insuring agreement
- Conditions
- Exclusions
- Definition of the insured
- Duties of the insured
- Obligations of the insurance company
- Mortgage rights
- Proof of loss
- Notice of claim
- Appraisal
- Other Insurance Provision
- Subrogation
- Elements of a contract
- Warranties, representations, and concealment
- Sources of underwriting information
- Fair Credit Reporting Act
- Privacy protection
- Policy application
- Terrorism Risk Insurance Act (TRIA)
- Types of Policies, Bonds, and related terms
- Commercial general liability
- Automobile: personal and business
- Workers Compensation Insurance, Employers Liability Insurance, and Related Issues
- Crime
- Bonds
- Professional Liability
- Insurance terms and related concepts
- Risk
- Hazards
- Indemnity
- Insurable Interest
- Loss valuation
- Negligence
- Liability
- Occurrence
- Binders
- Warranties
- Representation
- Concealment
- Deposit premium
- Audit
- Certificate of Insurance
- Law of Large Numbers
- Pure vs Speculative Risk
- Endorsements
- Damage
- Compliance with provisions of the Fair Credit Reporting Act
- Policy Provisions
- Declarations
- Insuring Agreement
- Conditions
- Exclusions and Limitations
- Definition of the Insured
- Duties of the Insured after loss
- Cancelation and non-renewal provisions
- Supplementary payments
- Proof of loss
- Notice of claim
- Arbitration
- Subrogation
- Loss settlement provisions
- TRIA
While the questions will vary from state-to-state for the second portion of the examination, questions will generally come from the following categories:
- Statutes and rules common to Property and Casualty Insurance
- Commissioner of Insurance
- Insurance definitions
- Licensing requirements
- Marketing practices
- Agent duties and responsibilities
- Statutes and rules for Property and Casualty Insurance
- Definitions
- Surplus lines
- Approval of rates and forms
- Homeowner’s Insurance
- Automobile Insurance
- Worker’s Compensation
- Property and Casualty Insurance Guaranty
Some states will combine both sections into one exam. Other states, like Texas, split the exam into two distinct portions where you will complete the general section first and then complete the state-specific section next.
Registration and cost
Most states have online registration for the licensing exam and application. When you register for the test, you will need to create an account with your full legal name. Payment for the exam is expected at the time of registration. Examination fees range from $44.00 to $170.00, exclusive of application and fingerprint fees which will incur additional cost.
Your state’s licensing board has the information you need to register for the exam including approved test providers, locations, and test times. Whatever method your state uses, be sure to follow the instructions for registration. Incomplete registrations will cost you additional time and, quite possibly, additional money.
Test Day
Follow the directions you receive from the testing facility. Most test centers require you to arrive 30 minutes before your exam appointment. Early arrival allows you to complete the necessary paperwork and have your identification verified. Your state may require proof of fingerprinting before your examination, but in most cases, you will complete the fingerprinting when you complete the exam. Hold on to your fingerprint receipt as it is required for your license application.
A pre-test may be offered before you begin the official examination. The pre-test provides candidates the opportunity to become comfortable with the test delivery method and is not counted against your test time. If you finish before your time is expired, review your questions to make sure you have answered them all. Once you are satisfied, submit your test for scoring.
Exam scoring and results
Each state sets the passing score required for licensing. Passing scores range from 60% to 75%, and the scoring methods are determined and set by each state. At the conclusion of your exam, you will receive a score report indicating your pass or fail status.
Preparing for the Property and Casualty Insurance exam
Across all states, the average pass rate for the exam is 55% with retest pass rates slightly better. Your career and income depend on your test results, so you do not want to go into the test ill-prepared.
How Can I Prepare for the Property and Casualty Insurance Test?
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