Are you interested in selling property and casualty (P&C) insurance? To break into the P&C industry, you'll need to obtain a property and casualty insurance license.
Requirements for testing vary from one state to the next. Generally speaking, though, they cover similar ground — and your process for preparation will be roughly the same regardless of where you're selling. Here's a look at what's on the test, along with some tips to help you prepare for the big day.
Exam Requirements for Selling P&C Insurance
Each state's department of insurance creates its own version of the P&C exam, and you'll need to pass the test for any state in which you plan to sell insurance. If you live in Massachusetts but plan to sell insurance in Vermont, for instance, you need to pass the Vermont property and casualty insurance exam to earn a license in that state.
Each state will have its own set of requirements you must complete before you sit for the exam. Some states will need you to take a pre-licensing course, but many don't include this requirement. A pre-licensing course is helpful if you plan to sit for the exam, as it will give you a lot of specific information for your state to help you get ready to pass. It will also provide you with the credit hours you need to qualify for a license.
Content of the exam
What can you expect to see for content on your property and casualty insurance exam? P&C is a broad industry, so the exam will cover a broad range of topics. It typically packs a lot of material into a series of multiple-choice questions. Some of the categories you can expect to see on the exam include:
- Composition of a policy: Do you know everything that makes up an insurance policy? Expect the exam to cover parts of an insurance policy including agreements, declarations, conditions, exclusions, and more.
- Concepts of insurance: There are many different concepts involved in writing P&C insurance policies. You'll need to understand both business and personal property and liability coverage. Expect questions on homeowners insurance, flood insurance, and contract law, as well.
- Optional policy provisions: An insurance policy will have unique optional provisions such as a waiver of premium or additional hazard riders. You'll need to understand how these add-ons fit with standard policy coverage.
- Specialty coverages: In some cases, individuals will seek to buy specialty insurance from you. This might include watercraft insurance or antique car insurance. Expect some testing on these unique coverage types.
- Third-party coverage details: Expect questions on third-party coverage. Liability policies and negligence are two of the topics that will be in play here, including benefits you get with “no-fault” coverage.
As you can see, there is a lot of ground to cover when taking the property and casualty insurance exam. Your best course of action is to prepare for everything so you can avoid surprises.
How many questions are in the P&C licensing exam?
It's always helpful to know what you are going into when it comes to an exam. You should know the format of the exam, how many questions you can expect, and how long it will take.
The P&C insurance exam is a multiple-choice exam with around 150 questions in total. It's split into two parts. The first part of the exam covers general insurance knowledge. The initial section will touch on different insurance products, terms on the policies, concepts, and more. The second part of the exam will cover state-specific information. You can expect testing on state laws, regulations, and similar topics.
It typically takes prospective agents around two to four hours to complete the P&C exam. This varies based on your state and how well-prepared you are for the material.
Prep time and cost of the P&C exam
Preparation time varies by person. Generally, you should expect to spend about 35 to 40 hours studying for the P&C exam. It's a good idea to set aside at least a few weeks to prepare.
The cost to sit for the P&C exam depends on your state. Each state will apply a charge for the exam, as well as a license application fee. Certain states will also require a fee for a background check. On average, the exam fee will range from $50 to $100 and license fees can cost up to $200.
Where to take the test
Each state's department of insurance partners with professional testing companies such as Prometric. You can schedule your exam at one of the many physical testing locations, or you can take it remotely. Online proctors will monitor you throughout while you take the test in the convenience of your home.
How To Pass Your P&C Insurance Exam With Flying Colors
Before you sit for the test, you need to be sure you are ready to commit the hours, dedicate your energy, and put everything you have into learning the material to pass the exam. Here are a few ways you can prepare.
Don't underestimate the difficulty of the exam
You are fully capable of passing the P&C insurance licensing exam for your state on the first try. Don't expect the test to be a walk in the park, though. Pass rates vary from one state to the next. According to data from the National Association of Insurance Commissioners (NAIC), the average pass rate for P&C exams is roughly 60% across all the states, but it varies quite a bit. In Louisiana, for instance, the P&C pass rate is 43.97%. In Georgia, it's 71%. The more you prepare and study with best practices, the higher your odds of success.
Make use of pre-licensing education courses
You may be trying to earn a license in a state that requires a pre-license course before you sit for the property and casualty exam. Even if not, it may still be a good idea to seek out a pre-licensing course. The class will cover everything you need to know about P&C insurance and set you up for success. You will need to study on your own, too, but the course will help lay the foundation and ensure you're reviewing everything.
Set up a study schedule
How do you plan to tackle your studying? Don't try to squeeze it in at random. Instead, set up a schedule you can stick to so you can stay on track as exam day nears. Map out your study plan so you are working toward the test date and allotting more time to review the material you're struggling with. With the test date in mind, you can hold yourself accountable to cover every topic in a timely manner.
Practice questions frequently
One of the best things you can do as you study for any exam is to practice answering questions frequently. You can read a particular study book two or three times, but if you don't remember the content well enough to answer questions about it, what's the point? As you study specific sections of the exam, review by answering questions about that topic.
Evaluate your results and focus on gaps
As you complete practice questions, focus on your results and work through the gaps. There will be holes in your knowledge. When you can evaluate practice question data to see where those gaps exist, you can plug them by reviewing content in those areas.
Use practice tests to your advantage
As you prepare for your P&C exam, never underestimate the power of the practice test. Aim to take one or two practice tests before you sit for the real thing. And when you take the practice tests, do so in a way that will simulate test day as much as possible. See how long it takes to work through the questions and where you struggle. Taking these practice tests will increase your odds of passing the exam on the first try.
Renewing Your License On Time
It's a huge relief when you finally pass the test and officially start your career as a P&C insurance agent. But, your license doesn't last forever — you'll need to renew it every three years. Each state will dictate what you must complete in terms of continuing professional education hours. These hours are designed to keep you up to date with developments in the industry and keep your knowledge fresh.
If you stay on top of it, you can keep your license active for as long as necessary without taking another exam. However, if you let your license expire without meeting your continuing education requirements, you may have to retake the test to get recertified.
Are You Ready for Your P&C Insurance Exam?
Taking and passing the property and casualty insurance exam is an essential step toward earning your license to begin selling P&C insurance. Like any test, it sounds scarier than it is. If you have a study plan in place and commit yourself, you can ace the exam and get your career started.
This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.
