Personal Lines Insurance Practice Exam Questions And Correct Verified Answers

PERSONAL LINES INSURANCE PRACTICE
EXAM QUESTIONS AND CORRECT
VERIFIED ANSWERS
Bobby,A2ageA216,A2borrowsA2hisA2parents'A2carA2withoutA2theirA2permissionA2andA2getsA2in
toA2anA2accident.A2WhichA2ofA2theA2followingA2statementsA2aboutA2coverageA2underA2theA2
parents'A2personalA2autoA2policyA2isA2CORRECT?

A)A2BobbyA2isA2coveredA2byA2hisA2parents'A2policyA2becauseA2heA2isA2includedA2inA2theA2d
efinitionA2ofA2namedA2insured.A2
B)A2BobbyA2isA2notA2coveredA2forA2thisA2accidentA2becauseA2heA2usedA2theA2carA2withoutA2
permission.A2
C)A2BobbyA2isA2notA2coveredA2becauseA2itA2wasA2notA2hisA2car.A2
D)A2BobbyA2isA2coveredA2byA2hisA2parents'A2policyA2becauseA2heA2isA2aA2familyA2member.A
2-A2Ans--
D)A2BobbyA2isA2coveredA2byA2hisA2parents'A2policyA2becauseA2heA2isA2aA2familyA2member.

Explanation:A2BobbyA2isA2aA2familyA2memberA2andA2thusA2automaticallyA2isA2coveredA2un
derA2theA2family'sA2PAPA2policy.A2EvenA2thoughA2BobbyA2isA2usingA2theA2carA2withoutA2per
mission,A2theA2exclusionA2pertainingA2toA2nonpermissiveA2usersA2doesA2notA2applyA2toA2u
seA2ofA2anA2ownedA2autoA2policyA2byA2residentA2familyA2members.

Reference:A28.7.2A2inA2LicenseA2ExamA2Manual

AA2parkingA2valetA2atA2aA2hotelA2usesA2aA2guest'sA2carA2toA2doA2aA2personalA2errandA2andA
2damagesA2theA2carA2inA2aA2collision.A2TheA2guestA2hasA2aA2personalA2autoA2policyA2(PAP
).A2TheA2insuranceA2companyA2willA2payA2theA2claimA2andA2____.

A)A2relieveA2theA2parkingA2valetA2ofA2legalA2liabilityA2forA2theA2loss
B)A2subrogateA2againstA2theA2namedA2insured
C)A2subrogateA2againstA2theA2parkingA2valet
D)A2recoverA2anyA2additionalA2lossA2fromA2theA2lienholderA2-A2Ans--
C)A2subrogateA2againstA2theA2parkingA2valet

Explanation:A2Part-
DA2coverageA2forA2DamageA2toA2YourA2AutoA2ofA2theA2PAPA2containsA2aA2noA2benefitA2toA2
baileeA2provision.A2ThisA2provisionA2statesA2thatA2aA2carrierA2orA2otherA2baileeA2forA2hire,A2
suchA2asA2aA2parkingA2gar5age,A2serviceA2station,A2orA2movingA2companyA2willA2notA2dire
ctlyA2orA2indirectlyA2benefitA2fromA2theA2PAP'sA2insurance.A2AA2baileeA2isA2anA2individualA2
orA2entityA2thatA2assumesA2possessionA2ofA2goodsA2ownedA2byA2anotherA2forA2theA2purpo
seA2ofA2transporting,A2servicing,A2orA2storingA2them.A2WhenA2temporaryA2custodyA2isA2ass
umed,A2theA2baileeA2becomesA2legallyA2liableA2forA2theA2goods.

Reference:A28.7.2A2inA2theA2LicenseA2ExamA2Manual

,WhoA2ofA2theA2followingA2areA2requiredA2toA2beA2membersA2ofA2theA2ArizonaA2PropertyA2a
ndA2CasualtyA2InsuranceA2GuarantyA2Fund?

A)A2AllA2insurersA2thatA2writeA2theA2typesA2ofA2insuranceA2thatA2areA2protectedA2byA2theA2fu
ndA2inA2Arizona
B)A2ForeignA2propertyA2andA2casualtyA2insurersA2only
C)A2lienA2propertyA2andA2casualtyA2insurersA2only
D)A2AllA2insurersA2thatA2writeA2insuranceA2inA2Arizona,A2includingA2lifeA2andA2healthA2insur
ersA2-A2Ans--
A)A2AllA2insurersA2thatA2writeA2theA2typesA2ofA2insuranceA2thatA2areA2protectedA2byA2theA2fu
ndA2inA2Arizona

Explanation:A2AllA2insurersA2thatA2writeA2typesA2ofA2insuranceA2thatA2areA2protectedA2byA2t
heA2fundA2areA2requiredA2toA2beA2memberA2insurersA2ofA2theA2fund.A2Reference:A2StateA2S
upplementA2inA2theA2LicenseA2ExamA2Manual.

Reference:A24.4.16.3A2inA2theA2LicenseA2ExamA2Manual

WhichA2oneA2ofA2theA2followingA2dwellingsA2wouldA2aA2HO-
3A2HomeownersA2FormA2cover?

A)A2Condominium
B)A2OfficeA2building
C)A2Single-familyA2home
D)A2ApartmentA2buildingA2-A2Ans--C)A2Single-familyA2home

Explanation:A2HO-3A2HomeownersA2FormA2coversA2owner-
occupiedA2singleA2familyA2dwellings.A2CondominiumsA2areA2coveredA2byA2theA2HO-
6.A2OfficeA2andA2apartmentA2buildingsA2wouldA2beA2coveredA2byA2aA2commercialA2policy.

Reference:A27.4.1A2inA2theA2LicenseA2ExamA2Manual

WhichA2onA2ofA2theA2followingA2wouldA2beA2classifiedA2asA2aA2generalA2damage?

A)A2PainA2andA2suffering
B)A2LostA2wages
C)A2MedicalA2bills
D)A2DamagedA2propertyA2-A2Ans--A)A2PainA2andA2suffering

Explanation:A2CompensatoryA2damagesA2compensateA2anA2injuredA2partyA2forA2injuriesA2
sustained-
A2nothingA2more.A2TheirA2purposeA2isA2toA2makeA2aA2personA2wholeA2againA2inA2theA2positi
onA2thatA2existedA2beforeA2theA2lossA2orA2harm.A2CompensatoryA2damagesA2areA2furtherA2
categorizedA2by:A2generalA2damagesA2(whichA2necessarilyA2resultA2fromA2theA2actA2orA2o
mission,A2suchA2asA2emotionalA2distress,A2inconvenience,A2andA2painA2andA2suffering)A2a

,ndA2specialA2damagesA2(lossesA2measuredA2inA2exactA2sumsA2ofA2moneyA2includingA2me
dicalA2bills,A2travelA2expensesA2forA2medicalA2care,A2prescriptionA2costsA2damagedA2prope
rty,A2andA2lostA2wages).

Reference:A25.3.6A2inA2theA2LicenseA2ExamA2Manual

WhichA2ofA2theA2followingA2statementsA2aboutA2floodA2insuranceA2isA2NOTA2correct?

A)A2ThereA2areA2twoA2typesA2ofA2floodA2insuranceA2programsA2available:A2emergencyA2an
dA2regular
B)A2AA2floodA2includesA2anA2overflowA2ofA2inlandA2orA2tidalA2waters
C)A2SewerA2backupA2intoA2aA2dwellingA2isA2notA2consideredA2floodA2andA2isA2notA2covered
D)A2PersonalA2propertyA2inA2aA2basementA2orA2outsideA2inA2theA2yardA2isA2coveredA2-
A2Ans--D)A2PersonalA2propertyA2inA2aA2basementA2orA2outsideA2inA2theA2yardA2isA2covered


Explanation:A2PersonalA2propertyA2inA2aA2basementA2orA2outsideA2inA2theA2yardA2isA2NOTA
2coveredA2underA2floodA2insurance.


Reference:A29.4A2inA2theA2LicenseA2ExamA2Manual

WhichA2ofA2theA2followingA2coveragesA2isA2NOTA2includedA2inA2aA2boatowners/
watercraftA2packageA2policy?

A)A2MedicalA2payments
B)A2Liability
C)A2LongshoreA2andA2harborA2workers'A2compensationA2insurance
D)A2PropertyA2-A2Ans--C)A2LongshoreA2andA2harborA2workers'A2compensationA2insurance

Explanation:A2Boatowners/
watercraftA2packageA2policiesA2wereA2developedA2byA2individualA2insuranceA2companiesA
2andA2theyA2combineA2property,A2liability,A2andA2medicalA2paymentsA2insuranceA2onA2anA2
openA2perilA2basis.A2LongshoreA2andA2harborA2workers'A2compensationA2insuranceA2isA2fo
undA2inA2personalA2yachtA2policies,A2whichA2areA2usedA2toA2insureA2largerA2vesselsA2thanA
2thoseA2coveredA2underA2boatownersA2policies.


Reference:A29.8.1A2inA2theA2LicenseA2ExamA2Manual

AnA2insuredA2ownsA2aA2petA2lionA2thatA2isA2cagedA2onA2theA2homeowner'sA2property.A2The
A2ownerA2takesA2greatA2careA2toA2warnA2neighborsA2ofA2theA2possibleA2dangerA2byA2postin
gA2signs,A2fencingA2theA2yard,A2andA2lockingA2theA2cageA2atA2allA2times.A2WhenA2aA2neigh
bor'sA2childA2managesA2toA2openA2theA2cageA2andA2isA2bitten,A2whatA2typeA2ofA2liabilityA2w
ouldA2applyA2toA2theA2lionA2owner?

A)A2AbsoluteA2liability
B)A2ContractualA2liability
C)A2PremisesA2liability

, D)A2VicariousA2liabilityA2-A2Ans--A)A2AbsoluteA2liability

Explanation:A2TheA2lawA2imposesA2strictA2orA2absoluteA2liabilityA2forA2specificA2situationsA2
orA2activitiesA2thatA2poseA2threatsA2toA2theA2safetyA2ofA2others.A2PeopleA2whoA2ownA2dang
erousA2animalsA2areA2heldA2toA2aA2higherA2standardA2ofA2care.A2AbsoluteA2liabilityA2applie
sA2whenA2aA2personA2isA2liableA2forA2aA2dangerousA2condition,A2regardlessA2ofA2theA2amou
ntA2ofA2careA2taken.

Reference:A25.3.4A2inA2theA2LicenseA2ExamA2Manual

WhichA2ofA2theA2followingA2termsA2isA2usedA2toA2describeA2anA2emptyA2buildingA2thatA2isA2
notA2beingA2used?

A)A2Vacated
B)A2Absent
C)A2Unoccupied
D)A2VacantA2-A2Ans--D)A2Vacant

Explanation:A2AA2buildingA2thatA2isA2notA2currentlyA2inA2useA2andA2doesA2notA2haveA2enou
ghA2furnishingsA2toA2functionA2inA2itsA2normalA2capacityA2isA2consideredA2vacant.A2AA2build
ingA2isA2unoccupiedA2ifA2noA2oneA2isA2currentlyA2inA2it,A2butA2furnishingsA2areA2presentA2an
dA2theA2occupantsA2intendedA2toA2return,A2asA2isA2theA2caseA2whenA2theA2residentsA2areA2
outA2ofA2townA2onA2vacation.

Reference:A24.4.15A2inA2theA2LicenseA2ExamA2Manual

WhichA2ofA2theA2followingA2statementsA2aboutA2umbrellaA2policiesA2isA2NOTA2correct?

A)A2TheyA2provideA2coverageA2aboveA2theA2limitsA2ofA2underlyingA2policies.
B)A2TheyA2areA2writtenA2onlyA2forA2commercialA2risks.
C)A2LossesA2thatA2areA2excludedA2byA2theA2underlyingA2policyA2butA2coveredA2byA2theA2u
mbrellaA2areA2subjectA2toA2theA2umbrella'sA2retentionA2limit.
D)A2IfA2theA2insuredA2failsA2toA2keepA2theA2underlyingA2coverageA2inA2force,A2theA2umbrella
A2policyA2willA2notA2coverA2theA2amountA2ofA2lossA2thatA2wouldA2haveA2beenA2paidA2byA2the
A2underlyingA2policy.A2-A2Ans--B)A2TheyA2areA2writtenA2onlyA2forA2commercialA2risks.


Explanation:A2UmbrellaA2liabilityA2policiesA2mayA2beA2writtenA2forA2bothA2personalA2andA2c
ommercialA2risks.

Reference:A29.9.1A2inA2theA2LicenseA2ExamA2Manual

TheA2agentA2hasA2manyA2responsibilitiesA2toA2theA2applicant.A2OneA2involvesA2aA2trustA2re
lationshipA2betweenA2theA2agentA2andA2theA2insuredA2regardingA2theA2insured'sA2finances
A2andA2confidentiality.A2InA2thisA2case,A2theA2agentA2actsA2inA2whatA2capacity?


A)A2Fiduciary