Alabama Personal Lines Exam
Study Guide – Practice
Questions with Verified
Answers. GRADED A+. Latest
2026/2027 Update
What is a hazard? - Answer✔✔-An increase in the possibility that a loss might
occur
The purpose of insurance is to: - Answer✔✔-Transfer risk from a person,
business or organization to an insurance company that agrees to pay for losses
in exchange for a premium
When the policyholder is considered an owner with the right to vote and share
in the profits the type of insurance company is a: - Answer✔✔-Mutual
company
Martha's home is insured by Big Insurance Company. Martha has recently
made the final mortgage payment to Large Mortgage Company. Martha is
contemplating selling her home to her best friend, Bernice. Which of the
following has an insurable interest in the home? - Answer✔✔-Martha
, Which of the following is not an element of insurability - Answer✔✔-Risk of
loss is a speculative risk
The principle that states that an insured should be restored to approximately
the same financial position after a loss as before is known as - Answer✔✔-
Indemnity
An individual who owns and lives in a condominium can obtain broad coverage
for personal property in the condo under which homeowners form -
Answer✔✔-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act -
Answer✔✔-Together consumer recourse if insurance is denied on the basis of
a credit report
Which of the following describes an insurance company doing business in a
state other than the one where it is incorporated - Answer✔✔-Foreign
The purpose of a binder is to - Answer✔✔-Provide temporary protection for
the insured between the time of the application is made in the policy is issued
or the binder expires
Which of the following describes actual cash value - Answer✔✔-Replacement
cost minus appreciation
Study Guide – Practice
Questions with Verified
Answers. GRADED A+. Latest
2026/2027 Update
What is a hazard? - Answer✔✔-An increase in the possibility that a loss might
occur
The purpose of insurance is to: - Answer✔✔-Transfer risk from a person,
business or organization to an insurance company that agrees to pay for losses
in exchange for a premium
When the policyholder is considered an owner with the right to vote and share
in the profits the type of insurance company is a: - Answer✔✔-Mutual
company
Martha's home is insured by Big Insurance Company. Martha has recently
made the final mortgage payment to Large Mortgage Company. Martha is
contemplating selling her home to her best friend, Bernice. Which of the
following has an insurable interest in the home? - Answer✔✔-Martha
, Which of the following is not an element of insurability - Answer✔✔-Risk of
loss is a speculative risk
The principle that states that an insured should be restored to approximately
the same financial position after a loss as before is known as - Answer✔✔-
Indemnity
An individual who owns and lives in a condominium can obtain broad coverage
for personal property in the condo under which homeowners form -
Answer✔✔-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act -
Answer✔✔-Together consumer recourse if insurance is denied on the basis of
a credit report
Which of the following describes an insurance company doing business in a
state other than the one where it is incorporated - Answer✔✔-Foreign
The purpose of a binder is to - Answer✔✔-Provide temporary protection for
the insured between the time of the application is made in the policy is issued
or the binder expires
Which of the following describes actual cash value - Answer✔✔-Replacement
cost minus appreciation
