The Property & Casualty course consists of 120 Units. Each Unit is followed by a Quiz. Below is Unit 109 and it’s Quiz exactly as they appear. As you will see, the jargon has been toned down making your comprehension a good bit easier. If you have been ‘concerned’ about the difficulty of the course, hopefully this preview will ease your worries!


Property & Casualty – Unit 109

Marine Insurance

Marine insurance is an extension of land-based property insurance. Ocean marine coverage was designed to protect ships and their cargo. Inland marine coverage was created to insure shipments carried by railroads, trucks, and aircraft.

Today, marine insurance policies cover any type of property that is being transported, has the potential to be transported, or is designed to move property or information from place to place, such as bridges, tunnels, computers and broadcast antennas.

Coverages provided under marine policies are highly specialized, unique and, to a great degree, unregulated. The regulated portion of marine insurance is referred to as regulated because the state insurance department approves the rates and forms companies use. This section will review the regulated side of marine coverage.

I. Commercial Ocean Marine Insurance
There are four major classes of ocean marine insurance that provide coverage against four types of losses:

• Hull Insurance

• Cargo Insurance

• Freight Insurance

• Protection and Indemnity (P&I) Insurance

A. Marine Hull Form

The marine hull form covers the perils of the seas, including the hostile actions of Men-of-War (fighting ships), pirates, rovers and thieves, fire, lightning, earthquakes, enemies, jettison, barratry and other like perils. Jettison is a voluntary act of destruction in which cargo is cast overboard to save the ship or crew. In barratry, the master or mariners steal the ship and its cargo, willfully sink or desert the ship or imperil the vessel by disobeying instructions.

1. Insuring agreement
The insuring agreement includes collision liability and loss during pilotage and towage. Additional coverages are disbursement, managers’ commissions, profits or excess or increased value of hull and machinery, and freight including chartered freight or anticipated freight insured for time in an amount not exceeding in the aggregate 25 percent of the agreed value, where agreed value is the coverage on the vessel.

2. Deductible Condition
All heavy weather damage or damage caused by contact with floating ice that occurs during a single sea passage between two successive ports is treated as though due to one accident. Therefore, one deductible is applied.

3. Additional Perils Covered
The policy covers damage caused directly by:
a) Accidents in loading, discharging or handling cargo;
b) Accidents while entering, leaving or sitting in dry-dock, graving docks, ways, gridirons or pontoons;
c) Explosions aboard ship or elsewhere; and
d) Breakdown of motor generators or other electrical machinery.

4. Exclusions
Commercial ocean marine insurance does not cover the following:
a) capture, seizures, arrest, restraint or detainment;
b) any taking of the vessel by requisition or otherwise, whether in time of peace or war;
c) damage or destruction from any mine, bomb or torpedo not carried as cargo aboard the vessel;
d) strikes, lockouts,, civil commotions, riots and martial law; and
e) malicious acts or vandalism unless committed by the vessel’s master or mariners.

5. Clauses
a) Free of Capture and Seizure Clause
The Free of Capture and Seizure Clause excludes war in all of its aspects. A separate war risk policy may be purchased to cover the perils of war.
b) Strike Riot and Civil Commotion clause
The Strike, Riot and Civil Commotion Clause excludes loss or damage caused by acts of strikers, rioters or persons engaged in civil commotion.

B. Ocean Marine Open Cargo Policy

1. Insuring Agreement
The insuring agreement says the policy pays for losses “touching the adventures and perils the underwriters are contended to bear and take upon themselves, they are of the seas, fire, assailing thieves, jettison, and barratry of the Master or Mainers, and like perils.” The ocean marine policy is still technically a named perils policy, because the phrase referring to like perils means the coverage applies only to listed perils.

2. Inchmaree Clause (Additional Perils)
The Inchmaree Clause covers bursting boilers, breaking propeller shafts or damage resulting from any latent defect in the machinery, hull or appurtenances. The policy also applies to loss due to faults or errors in navigation by the master, mariners, mates, engineers, and pilots.

3. Marine Extensions
The insurance attaches from the time the goods leave the warehouse at the place named in the policy until the goods are delivered to the final warehouse at the destination named.

Take Quiz


Below is the Quiz for Unit 109. If you can read the above text, and correctly answer 4 of the 5 Quiz questions, you pass this Unit. If you get 3 or less correct, you must re-take the Unit, and do so until you pass.


Property & Casualty – Unit 109

1. Allison Shipping International bought two large oil tankers. They want to insure these ships against the perils of the seas. Which of the following policies would best meet their needs?

a) Hull Insurance
b) Freight Insurance
c) Cargo Insurance
d) Protection and Indemnity Insurance

2. The Templar Insurance Company offers ocean marine insurance. Their policy lists covered perils. exclusions, limitations, and definitions. TDI considers this policy as a (an) _______ policy.

a) all risk
b) limited risk
c) named perils
d) special risk

3. Grieg Star Shipping wants to cover their vessels from bursting boilers, breaking propeller shafts or damage resulting from any latent defect in the machinery, hull or appurtenances. Which clause best covers their needs?

a) Inchmaree Clause
b) Appurtenances Clause
c) Machinery Clause
d) Vessel Clause

4. Angel Water Shipping has decided to make one more trip through the northern ice field before the shipping route closes for the winter. On November 13th, while traveling through the ice field, the ship struck an iceberg which punctured a hole in the first storage unit. On November 16th, the ship hit a second iceberg tearing a hole along the 5th and 6th storage units. The Marine Hull Form had a $25,000,000 limit of insurance with a $1,000,000 deductible. The first loss was valued as $500,000 in damages and the second loss was valued at $750,000. What will Angel Water Shipping receive for these losses?

a) $500,000
b) $1,250,000
c) $250,000
d) $0

5. A Commercial Ocean Marine policy will exclude all damages caused by the following situations except _______.

a) Damage resulting from the capture of the vessel.
b) Damages from Cluster Bombs being carried as part of the ships’ cargo.
c) Damage caused by civil commotions.
d) Damage from vandalism unless committed by the ship’s crew.



After completing the course, you will download the entire text and spend 10 hours in self study (as mandated by Texas Department of Insurance). You are then ready for the Final Exam. You have 3 hours to answer 150 multiple choice questions. When you pass, you will download 2 affidavits (Student & Proctor), and mail to our address. Once received, we mail you your completition certificate with instructions on fingerprinting and TDI application form. All of that is then mailed to Austin, Texas. Your paperwork is processed and your license is mailed out in 7 to 10 days.

There is no time limit on completing the Property & Casualty course. It is available online 24/7.


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Related information:

Becoming an Adjuster

Earnings Potential

Texas License – Who Needs One?

Guide to Staff Adjusting


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