PERSONAL LINES INSURANCE EXAM
PERSONAL LINES INSURANCE EXAM QUESTIONS AND
ANSWERS GRADED A+ LATEST UPDATE.
Risk _________ is when one takes action to prevent or reduce
potential loss. ANS >>> Reduction
When the number of similar units increases, the predictability
of the loss improves according to the rule of _____ ________.
ANS >>> Large Numbers
The insuring of risks that are more prone to losses than average
risks is known as? ANS >>> Adverse Selection
,PERSONAL LINES INSURANCE EXAM
A ___________ contract is an arrangement where one insurer
transfers or shares risks with another insurer. ANS >>>
Reinsurance
_____________ Reinsurance is accepted or rejected by a case-
by-case basis. ANS >>> Facultative
The fact that an insured would profit from a loss, would be a
violation of the principle of ___________. ANS >>> Indemnity
The determination of acceptable risks is the primary function of
the ___________. ANS >>> Underwriter
Underwriters like to select insureds whose actual losses will be
similar to expected losses. True or False? ANS >>> True
When rates cannot be used until they are improved by the
department or division of insurance, they are called ____
________ rates. ANS >>> Prior Approval
,PERSONAL LINES INSURANCE EXAM
The termination of a policy by either the insured or insurer
before its expiration date is known as ___________. ANS >>>
Cancellation
When the insurer cancels a property policy, the unearned
premium is returned ___ ____. ANS >>> Pro Rata
When an insured requests cancellation of a policy, the
unearned premium is refunded to the insured on a _____
_____. ANS >>> Short Rate
A fire is considered to be a _____ of a potential loss. ANS >>>
Cause
A document that provides temporary insurance coverage until a
policy is issued is known as a ______. ANS >>> Binder
The process by which a disputed claim is decided by a neutral
third party is known as ___________. ANS >>> Arbitration
_________ _________ is a situation where there are two causes
resulting in a loss, with one of the causes excluded and the
, PERSONAL LINES INSURANCE EXAM
other cause of loss not excluded. ANS >>> Concurrent
Causation
If two or more policies provide identical coverage for the same
risk, the policies are deemed to be __________. ANS >>>
Concurrent
Policy A is written for $100,000, and an excess Policy B is
written for $200,000 on the same property. In the event of a
$20,000 loss, how much will each policy pay? ANS >>> A=
$20,000; B= $0
A building that has neither occupants nor personal property is
______. ANS >>> Vacant
When property is damaged by fire, the loss is said to be a(n)
______ loss. ANS >>> Direct
If a fire on a premises caused a power outage, which caused
meat in the freezer to spoil, would the meat spoilage be
considered a direct loss or indirect loss? ANS >>> Indirect Loss
PERSONAL LINES INSURANCE EXAM QUESTIONS AND
ANSWERS GRADED A+ LATEST UPDATE.
Risk _________ is when one takes action to prevent or reduce
potential loss. ANS >>> Reduction
When the number of similar units increases, the predictability
of the loss improves according to the rule of _____ ________.
ANS >>> Large Numbers
The insuring of risks that are more prone to losses than average
risks is known as? ANS >>> Adverse Selection
,PERSONAL LINES INSURANCE EXAM
A ___________ contract is an arrangement where one insurer
transfers or shares risks with another insurer. ANS >>>
Reinsurance
_____________ Reinsurance is accepted or rejected by a case-
by-case basis. ANS >>> Facultative
The fact that an insured would profit from a loss, would be a
violation of the principle of ___________. ANS >>> Indemnity
The determination of acceptable risks is the primary function of
the ___________. ANS >>> Underwriter
Underwriters like to select insureds whose actual losses will be
similar to expected losses. True or False? ANS >>> True
When rates cannot be used until they are improved by the
department or division of insurance, they are called ____
________ rates. ANS >>> Prior Approval
,PERSONAL LINES INSURANCE EXAM
The termination of a policy by either the insured or insurer
before its expiration date is known as ___________. ANS >>>
Cancellation
When the insurer cancels a property policy, the unearned
premium is returned ___ ____. ANS >>> Pro Rata
When an insured requests cancellation of a policy, the
unearned premium is refunded to the insured on a _____
_____. ANS >>> Short Rate
A fire is considered to be a _____ of a potential loss. ANS >>>
Cause
A document that provides temporary insurance coverage until a
policy is issued is known as a ______. ANS >>> Binder
The process by which a disputed claim is decided by a neutral
third party is known as ___________. ANS >>> Arbitration
_________ _________ is a situation where there are two causes
resulting in a loss, with one of the causes excluded and the
, PERSONAL LINES INSURANCE EXAM
other cause of loss not excluded. ANS >>> Concurrent
Causation
If two or more policies provide identical coverage for the same
risk, the policies are deemed to be __________. ANS >>>
Concurrent
Policy A is written for $100,000, and an excess Policy B is
written for $200,000 on the same property. In the event of a
$20,000 loss, how much will each policy pay? ANS >>> A=
$20,000; B= $0
A building that has neither occupants nor personal property is
______. ANS >>> Vacant
When property is damaged by fire, the loss is said to be a(n)
______ loss. ANS >>> Direct
If a fire on a premises caused a power outage, which caused
meat in the freezer to spoil, would the meat spoilage be
considered a direct loss or indirect loss? ANS >>> Indirect Loss
