Alabama Property and Casualty Sample Quiz (100 Questions)
With Complete Solutions
What is a hazard? –ANSWER; an increase in the possibility that a loss might occur
Transfer risk from a person or business to an insurance company that agrees to to
pay for losses in exchange for a premium. - ANSWER; insurance
The type of insurance company in which the policyholder is considered an owner,
with the right to vote and share in the profits is a - ANSWER; mutual company
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made
the final mortgage payment to FBN Mortgage Company. Jewel is considering
selling her home to her niece, Cynthia. Who has an insurable interest in the home?
- ANSWER; Jewel Canford
ANSWER; Risk of loss is a speculative risk - Which one of the following is NOT an
element of insurability?
a. Loss must be calculable
b. Risk of loss must represent a financial harship
c. Cost of insurance must be affordable
d. 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
ANSWER; Declarations - What part of an insurance policy personalizes the policy
as to who and what are insured?
An insurance policy is prepared by the insurance company, with little or no input
from the insured. This means that an insurance policy is a/an... - ANSWER;
adhesion contract
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
What is the purpose of the Fair Credit Reporting Act? - ANSWER; to give the
consumer recourse if insurance is denied on the basis of a credit report.
, a fire that was caused by the insureds negligence burns a neighbors building, the
owner of the building sues the insured. - ANSWER; Which of the following is a
liability loss?
What rating method involves modifying the premium based on the insured's loss
experience over a specified period of time? - ANSWER; Experience rating
Most Flood insurance coverage is provided by - ANSWER; a federal government
program
Which of the following businesses could be eligible for a Business owners policy?
a. Hometown Bank & Trust
b. Rest Easy Motel
c. Family Fun Time Amusement Park
d. Joe's Bar and Grill - ANSWER; Rest Easy Motel
ANSWER; Pain and Suffering - Which one of the following types of benefits is
generally not provided by a state's workers compensation law?
ANSWER; foreign - Which of the following describes an insurance company doing
business in a state other than the one where it is incorporated?
ANSWER; provide temporary protection for the insured between the time the
application is made and the policy is issued or the binder expires - The purpose of
a binder is to
Agent Michelle is under contract with the XYZ Insurance Company to represent
and sell insurance only for XYZ. This is an example of what type of agency system?
- ANSWER; Exclusive/captive
What type of insurance policy insures against all risks of loss that are not
specifically excluded by the policy? - ANSWER; Open peril policy
ANSWER; prior approval state - In a particular state, an insurance company must
file policy forms and rates with the state insurance department and wait for
official approval before using the new forms and rates. This is an example of a/an
According to the Nationwide Definition, imports and exports are - ANSWER;
eligible for Ocean Marine insurance
With Complete Solutions
What is a hazard? –ANSWER; an increase in the possibility that a loss might occur
Transfer risk from a person or business to an insurance company that agrees to to
pay for losses in exchange for a premium. - ANSWER; insurance
The type of insurance company in which the policyholder is considered an owner,
with the right to vote and share in the profits is a - ANSWER; mutual company
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made
the final mortgage payment to FBN Mortgage Company. Jewel is considering
selling her home to her niece, Cynthia. Who has an insurable interest in the home?
- ANSWER; Jewel Canford
ANSWER; Risk of loss is a speculative risk - Which one of the following is NOT an
element of insurability?
a. Loss must be calculable
b. Risk of loss must represent a financial harship
c. Cost of insurance must be affordable
d. 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
ANSWER; Declarations - What part of an insurance policy personalizes the policy
as to who and what are insured?
An insurance policy is prepared by the insurance company, with little or no input
from the insured. This means that an insurance policy is a/an... - ANSWER;
adhesion contract
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
What is the purpose of the Fair Credit Reporting Act? - ANSWER; to give the
consumer recourse if insurance is denied on the basis of a credit report.
, a fire that was caused by the insureds negligence burns a neighbors building, the
owner of the building sues the insured. - ANSWER; Which of the following is a
liability loss?
What rating method involves modifying the premium based on the insured's loss
experience over a specified period of time? - ANSWER; Experience rating
Most Flood insurance coverage is provided by - ANSWER; a federal government
program
Which of the following businesses could be eligible for a Business owners policy?
a. Hometown Bank & Trust
b. Rest Easy Motel
c. Family Fun Time Amusement Park
d. Joe's Bar and Grill - ANSWER; Rest Easy Motel
ANSWER; Pain and Suffering - Which one of the following types of benefits is
generally not provided by a state's workers compensation law?
ANSWER; foreign - Which of the following describes an insurance company doing
business in a state other than the one where it is incorporated?
ANSWER; provide temporary protection for the insured between the time the
application is made and the policy is issued or the binder expires - The purpose of
a binder is to
Agent Michelle is under contract with the XYZ Insurance Company to represent
and sell insurance only for XYZ. This is an example of what type of agency system?
- ANSWER; Exclusive/captive
What type of insurance policy insures against all risks of loss that are not
specifically excluded by the policy? - ANSWER; Open peril policy
ANSWER; prior approval state - In a particular state, an insurance company must
file policy forms and rates with the state insurance department and wait for
official approval before using the new forms and rates. This is an example of a/an
According to the Nationwide Definition, imports and exports are - ANSWER;
eligible for Ocean Marine insurance
