PSI PERSONAL LINES EXAM QUESTIONS AND CORRECT
ANSWERS
which cof cthe cfollowing cis cthe ctype cof cinsurance cthe cgovernment cmay cstep cin cto cprovide cthat cis cNOT cordinarily cavailable cfor
cprivate cinsuerers c- cCORRECT cANS✔✔residential cmarket
which cof cthe cfollowing cdescribes can cinsurer cthat cmeets cthe cinsurance cdepartment's cstandards cand cis cauthorized cto cdo
cbusiness cin cthe cstate c- cCORRECT cANS✔✔admitted
in cwhich cof cthe cfollowing ctypes cof cinsurance corganizations care cprofits creturned cto cthe cinsureds cin cthe cform cof cdivendends c-
cCORRECT cANS✔✔mutuals
which cof cthe cfollowing cis cnot cauthorized cto ctransact cinsurance cin cthe cstate c- cCORRECT cANS✔✔non cadmitted cinsurer
all cof cthe cfollowing csell cinsurance cin cthe cresidential cmarket cEXCEPT c- cCORRECT cANS✔✔disability cinsurance
what ctype cof cinsurer cis cowned cby cits cpolicy cholders c- cCORRECT cANS✔✔mutual ccompanies
what cis canother cway cof cdescribing cthe cstructure cof ca cmutual cinsurance ccompany c- cCORRECT cANS✔✔participating
a cparticipating ccomapny cheadquartered cin cguam cauthorized cto cdo cbusiness cin cyour cstate cwould cbe cdescribed cas cwhich
ccompany c- cCORRECT cANS✔✔an cadmitted, cforeign cmutal ccompany
purchasing cinsurance cthat cis cunavailable cin cyour cstate cfrom ca cnon cadmitted ccomapny cwould cbe cwhat ckind cof ctransaction c-
cCORRECT cANS✔✔surplus clines
what cpart cof clegal ccontract crefers cto can cexchhange cof cvalue c- cCORRECT cANS✔✔consideration
all cof cthe cfollowing care cconsidered cto cbe cincompentent cto center cinto ca ccontract cEXCEPT c- cCORRECT cANS✔✔someone
cwho cis cincarcerated
what cis cthe cterm cfor ca cproposal cmade cby cone cof cthe cpotential cparties cto ccontract c- cCORRECT cANS✔✔offer
when cone cparty cof ca ccontract chas cgreater cpower cover cthe cother cparty cin ca cdrafting cthe ccontract, cwhat ctype cof ccontract cis cit
c- cCORRECT cANS✔✔contract cof cadhension
some cinsureds cpay cinsurance cpremiums cand cnever chave ca ccovered closs, cwhile cothers cmay chave ca ccatastrophic cevent cthat
cpays cmuch cmore cthan ca clifetime cof cpremiums. cAs ca cresult, cinsurance ccontracts care cconsidered cto cbe c- cCORRECT
cANS✔✔aleatory
which cof cthe cfollowing cbest cdefines ca cpersonal cinsurance ccontract c- cCORRECT cANS✔✔the cinsurance ccontract cis cdesigned
cto ctransfer crisk cfrom cthe cinsured cto cthe cinsurer
if ca ccovered closs coccurs, cthe cinsured cmust cprovide cproof cof closs, cand cthe cinsurer cmust crespond cwithin ca cspecified ctime
cperiod cfollowing cthe closs. cthis cis cbecause cinsurance ccontracts care cwich ctype cof ccontract c- cCORRECT cANS✔✔conditional
when cthe ccourt cresolves cany cambiguity cin cpolicy cwording cin cfavor cof cthe cinsured, cis cis cbecause cof cthe c- cCORRECT
cANS✔✔doctrine cof cresonable cexpectations
with cregard cto cproperty cinsurance, cconsideration cis cthe c- cCORRECT cANS✔✔payment cof cpremium cby cthe cinsured cin creturn
cfor cthe cpromise cto cpay ccovered cclaims
, all cof cthe cfollowing care celements cof ca cvalid ccontract cEXCEPT c- cCORRECT cANS✔✔provisions
what cis cNot cnecessary cto cform ca clegal ccontract c- cCORRECT cANS✔✔counter-offer
which cstatement cconcerning cPropert cand cCasualty ccontracts cis cTRUE c- cCORRECT cANS✔✔property cis ca ctwo-party ccontract,
cand ccasualty cis ca cthird cparty ccontract
what ctype cof cauthority cis cin cwriting cand callows ca cproducer cto cact con cbehalf cof cthe cinsurer c- cCORRECT cANS✔✔express
what cauthority cis cNOT cwritten cand callows ca cproducer cto cconduct cthe cbusiness cof cthe cinsurer c- cCORRECT cANS✔✔implied
the cpublic cassumes ca cprodcing cagent chas cwhat ckind cof cauthority c- cCORRECT cANS✔✔appaerent cauthority
under cthe claws cof cagency, cthe cproducer cis can cagent, cand cthe cinsurance ccompany cis cthe c- cCORRECT cANS✔✔principal
which ccharacteristic cof can cinsurance ccontract cstates cthat cwhen ca closs coccurs cthe cinsured cshould cbe crestored cto cthe
cfinancial ccondition che cwas cin cbefore cthe closs c- cCORRECT cANS✔✔contract cof cindemnity
which cprinciple cholds cthat cthe cinsurer crelies con cthe ctruthfulness cof cthe capplicant cand cin creturn cpromises cans chas cthe cability
cto cpay cclaims c- cCORRECT cANS✔✔good cfaith
misrepresentation cmay cvoid can cinsurance cpolicy conly cunder cwhich cof cthe cfollowing ccircumstances c- cCORRECT cANS✔✔it
cinvolves ca cmaterial cfact
one cof cthe ccriteria cto cdetermine can cinsurable crisk cis c- cCORRECT cANS✔✔calculable closs
which cof cthe cfollowing cgives ca cmortgagee crights cat cthe ctime cof closs c- cCORRECT cANS✔✔insurable cinterest cin cthe cproperty
to cbe cpaid ca cclaim cunder ca cproperty cand ccasualty ccontract, cwhen cmust cinsurable cinterest cexist c- cCORRECT cANS✔✔at cthe
ctime cof closs
absolute cliability ccan cbe cimposed cby claw cand cexist cin cthe cabsence cof c- cCORRECT cANS✔✔negligence
which cdocument cwould ca clender cask can cinsured cfor cas cevidence cthat ca cpolicy chas cbeen cwritten c- cCORRECT
cANS✔✔certificate cof cinsurance
which cof cthe cfollowing cdoes ca cbinder cof ccoverage cguarantee c- cCORRECT cANS✔✔coverage cis cin ca cplace cimmediately
underwritters care cpermitted cto cuse call cof cthe cfollowing cwhen cunderwriting can capplication cfor cinsurance cEXCEPT c-
cCORRECT cANS✔✔disability
which cstatement cabout ca cbinder cis cFALSE c- cCORRECT cANS✔✔it cassures cthat ca cpolicy cwill cbe cissued
A cperson cwho cintentially cdefrauds can cinsurer cto cgain cfrom ca cclaim cis can cexample cof cwhich ctype cof chazard c- cCORRECT
cANS✔✔moral chazard
which cof cthe cfollowing chazards cis can cexample cof ca cphysical chazard c- cCORRECT cANS✔✔burning ca cdebris cnear cthe
cbuilding con ca ccalm csunny cday
a cmarale chaxard cis cconsidered c- cCORRECT cANS✔✔indifference cto closs
open cperils ccoverage cis calso ccalled c- cCORRECT cANS✔✔special cperil ccoverage
which cis can cexample cof cperil c- cCORRECT cANS✔✔hail
what cis cNOT ca cbasic cperil c- cCORRECT cANS✔✔collapse
which cis cNOT ca cbroad cform cperil c- cCORRECT cANS✔✔volcanic caction
an cindirect closs cis calso cknown cas c- cCORRECT cANS✔✔a cconsequentil closs
the cproperty cvaluation cmethod cpaying cthe cfull cpolicy camount clisted con cthe cdeclorations cpage cin cthe cevent cof ca ctotal closs,
cregardless cof cthe cactual ccash cvalue cis ccalled c- cCORRECT cANS✔✔valued cpolicy
which cof cthe cfollowing cis can cexample cof creplacement ccost cvaluation c- cCORRECT cANS✔✔cost cnew cwithout cdepreciation cat
cthe ctime cof closs
which cof cthe cfollowing cdescribes cmarket cvalue c- cCORRECT cANS✔✔it cis cwhat cproperty ccan cbe csold cfor
determining cadequate cindemnification cafter ca closs cis ca cprinciple cduty cof cthe c- cCORRECT cANS✔✔insurer
which cvaluation cmethod cis cused cto cby cthe cinsurer cand cthe cinsured cto cspecify cvalue cof ca cparticular cproperty cbefore cthe
cpolicy cis cissued c- cCORRECT cANS✔✔agreed cvalue
ANSWERS
which cof cthe cfollowing cis cthe ctype cof cinsurance cthe cgovernment cmay cstep cin cto cprovide cthat cis cNOT cordinarily cavailable cfor
cprivate cinsuerers c- cCORRECT cANS✔✔residential cmarket
which cof cthe cfollowing cdescribes can cinsurer cthat cmeets cthe cinsurance cdepartment's cstandards cand cis cauthorized cto cdo
cbusiness cin cthe cstate c- cCORRECT cANS✔✔admitted
in cwhich cof cthe cfollowing ctypes cof cinsurance corganizations care cprofits creturned cto cthe cinsureds cin cthe cform cof cdivendends c-
cCORRECT cANS✔✔mutuals
which cof cthe cfollowing cis cnot cauthorized cto ctransact cinsurance cin cthe cstate c- cCORRECT cANS✔✔non cadmitted cinsurer
all cof cthe cfollowing csell cinsurance cin cthe cresidential cmarket cEXCEPT c- cCORRECT cANS✔✔disability cinsurance
what ctype cof cinsurer cis cowned cby cits cpolicy cholders c- cCORRECT cANS✔✔mutual ccompanies
what cis canother cway cof cdescribing cthe cstructure cof ca cmutual cinsurance ccompany c- cCORRECT cANS✔✔participating
a cparticipating ccomapny cheadquartered cin cguam cauthorized cto cdo cbusiness cin cyour cstate cwould cbe cdescribed cas cwhich
ccompany c- cCORRECT cANS✔✔an cadmitted, cforeign cmutal ccompany
purchasing cinsurance cthat cis cunavailable cin cyour cstate cfrom ca cnon cadmitted ccomapny cwould cbe cwhat ckind cof ctransaction c-
cCORRECT cANS✔✔surplus clines
what cpart cof clegal ccontract crefers cto can cexchhange cof cvalue c- cCORRECT cANS✔✔consideration
all cof cthe cfollowing care cconsidered cto cbe cincompentent cto center cinto ca ccontract cEXCEPT c- cCORRECT cANS✔✔someone
cwho cis cincarcerated
what cis cthe cterm cfor ca cproposal cmade cby cone cof cthe cpotential cparties cto ccontract c- cCORRECT cANS✔✔offer
when cone cparty cof ca ccontract chas cgreater cpower cover cthe cother cparty cin ca cdrafting cthe ccontract, cwhat ctype cof ccontract cis cit
c- cCORRECT cANS✔✔contract cof cadhension
some cinsureds cpay cinsurance cpremiums cand cnever chave ca ccovered closs, cwhile cothers cmay chave ca ccatastrophic cevent cthat
cpays cmuch cmore cthan ca clifetime cof cpremiums. cAs ca cresult, cinsurance ccontracts care cconsidered cto cbe c- cCORRECT
cANS✔✔aleatory
which cof cthe cfollowing cbest cdefines ca cpersonal cinsurance ccontract c- cCORRECT cANS✔✔the cinsurance ccontract cis cdesigned
cto ctransfer crisk cfrom cthe cinsured cto cthe cinsurer
if ca ccovered closs coccurs, cthe cinsured cmust cprovide cproof cof closs, cand cthe cinsurer cmust crespond cwithin ca cspecified ctime
cperiod cfollowing cthe closs. cthis cis cbecause cinsurance ccontracts care cwich ctype cof ccontract c- cCORRECT cANS✔✔conditional
when cthe ccourt cresolves cany cambiguity cin cpolicy cwording cin cfavor cof cthe cinsured, cis cis cbecause cof cthe c- cCORRECT
cANS✔✔doctrine cof cresonable cexpectations
with cregard cto cproperty cinsurance, cconsideration cis cthe c- cCORRECT cANS✔✔payment cof cpremium cby cthe cinsured cin creturn
cfor cthe cpromise cto cpay ccovered cclaims
, all cof cthe cfollowing care celements cof ca cvalid ccontract cEXCEPT c- cCORRECT cANS✔✔provisions
what cis cNot cnecessary cto cform ca clegal ccontract c- cCORRECT cANS✔✔counter-offer
which cstatement cconcerning cPropert cand cCasualty ccontracts cis cTRUE c- cCORRECT cANS✔✔property cis ca ctwo-party ccontract,
cand ccasualty cis ca cthird cparty ccontract
what ctype cof cauthority cis cin cwriting cand callows ca cproducer cto cact con cbehalf cof cthe cinsurer c- cCORRECT cANS✔✔express
what cauthority cis cNOT cwritten cand callows ca cproducer cto cconduct cthe cbusiness cof cthe cinsurer c- cCORRECT cANS✔✔implied
the cpublic cassumes ca cprodcing cagent chas cwhat ckind cof cauthority c- cCORRECT cANS✔✔appaerent cauthority
under cthe claws cof cagency, cthe cproducer cis can cagent, cand cthe cinsurance ccompany cis cthe c- cCORRECT cANS✔✔principal
which ccharacteristic cof can cinsurance ccontract cstates cthat cwhen ca closs coccurs cthe cinsured cshould cbe crestored cto cthe
cfinancial ccondition che cwas cin cbefore cthe closs c- cCORRECT cANS✔✔contract cof cindemnity
which cprinciple cholds cthat cthe cinsurer crelies con cthe ctruthfulness cof cthe capplicant cand cin creturn cpromises cans chas cthe cability
cto cpay cclaims c- cCORRECT cANS✔✔good cfaith
misrepresentation cmay cvoid can cinsurance cpolicy conly cunder cwhich cof cthe cfollowing ccircumstances c- cCORRECT cANS✔✔it
cinvolves ca cmaterial cfact
one cof cthe ccriteria cto cdetermine can cinsurable crisk cis c- cCORRECT cANS✔✔calculable closs
which cof cthe cfollowing cgives ca cmortgagee crights cat cthe ctime cof closs c- cCORRECT cANS✔✔insurable cinterest cin cthe cproperty
to cbe cpaid ca cclaim cunder ca cproperty cand ccasualty ccontract, cwhen cmust cinsurable cinterest cexist c- cCORRECT cANS✔✔at cthe
ctime cof closs
absolute cliability ccan cbe cimposed cby claw cand cexist cin cthe cabsence cof c- cCORRECT cANS✔✔negligence
which cdocument cwould ca clender cask can cinsured cfor cas cevidence cthat ca cpolicy chas cbeen cwritten c- cCORRECT
cANS✔✔certificate cof cinsurance
which cof cthe cfollowing cdoes ca cbinder cof ccoverage cguarantee c- cCORRECT cANS✔✔coverage cis cin ca cplace cimmediately
underwritters care cpermitted cto cuse call cof cthe cfollowing cwhen cunderwriting can capplication cfor cinsurance cEXCEPT c-
cCORRECT cANS✔✔disability
which cstatement cabout ca cbinder cis cFALSE c- cCORRECT cANS✔✔it cassures cthat ca cpolicy cwill cbe cissued
A cperson cwho cintentially cdefrauds can cinsurer cto cgain cfrom ca cclaim cis can cexample cof cwhich ctype cof chazard c- cCORRECT
cANS✔✔moral chazard
which cof cthe cfollowing chazards cis can cexample cof ca cphysical chazard c- cCORRECT cANS✔✔burning ca cdebris cnear cthe
cbuilding con ca ccalm csunny cday
a cmarale chaxard cis cconsidered c- cCORRECT cANS✔✔indifference cto closs
open cperils ccoverage cis calso ccalled c- cCORRECT cANS✔✔special cperil ccoverage
which cis can cexample cof cperil c- cCORRECT cANS✔✔hail
what cis cNOT ca cbasic cperil c- cCORRECT cANS✔✔collapse
which cis cNOT ca cbroad cform cperil c- cCORRECT cANS✔✔volcanic caction
an cindirect closs cis calso cknown cas c- cCORRECT cANS✔✔a cconsequentil closs
the cproperty cvaluation cmethod cpaying cthe cfull cpolicy camount clisted con cthe cdeclorations cpage cin cthe cevent cof ca ctotal closs,
cregardless cof cthe cactual ccash cvalue cis ccalled c- cCORRECT cANS✔✔valued cpolicy
which cof cthe cfollowing cis can cexample cof creplacement ccost cvaluation c- cCORRECT cANS✔✔cost cnew cwithout cdepreciation cat
cthe ctime cof closs
which cof cthe cfollowing cdescribes cmarket cvalue c- cCORRECT cANS✔✔it cis cwhat cproperty ccan cbe csold cfor
determining cadequate cindemnification cafter ca closs cis ca cprinciple cduty cof cthe c- cCORRECT cANS✔✔insurer
which cvaluation cmethod cis cused cto cby cthe cinsurer cand cthe cinsured cto cspecify cvalue cof ca cparticular cproperty cbefore cthe
cpolicy cis cissued c- cCORRECT cANS✔✔agreed cvalue
