Alabama Property and Casualty Sample Quiz 1-100 with 100% Correct Answers

Alabama Property and Casualty Sample Quiz 1-100 with 100% Correct Answers What is a hazard? - Answer️️ -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. - Answer️️ - 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 - Answer️️ - 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? - Answer️️ -Jewel Canford Risk of loss is a speculative risk - Answer️️ -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 ©SOPHIABENNETT@ Saturday, August 24, 2024 8:52 AM 2 The principle that states that an insured should be restored to approximately the same financial position after a loss as before is known as... - Answer️️ -indemnity Declarations - Answer️️ -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... - Answer️️ -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? - Answer️️ -HO-6 What is the purpose of the Fair Credit Reporting Act? - Answer️️ -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. - Answer️️ -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? - Answer️️ - Experience rating Most Flood insurance coverage is provided by - Answer️️ -a federal government program ©SOPHIABENNETT@ Saturday, August 24, 2024 8:52 AM 3 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 - Answer️️ -Rest Easy Motel Pain and Suffering - Answer️️ -Which one of the following types of benefits is generally not provided by a state's workers compensation law? foreign - Answer️️ -Which of the following describes an insurance company doing business in a state other than the one where it is incorporated? provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires - Answer️️ -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? - Answer️️ -Exclusive/captive What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy? - Answer️️ -Open peril policy prior approval state - Answer️️ -In a particular state, an insurance company must file policy forms and rates with the state insurance ©SOPHIABENNETT@ Saturday, August 24, 2024 8:52 AM 4 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 - Answer️️ -eligible for Ocean Marine insurance Which Surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? - Answer️️ -Payment bond What describes actual cash value? - Answer️️ -Replacement cost- depreciation appraisal condition - Answer️️ -The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is the An insured purchased new furniture for $6000. At the time of a fire los, it had depreciated $2000. The same furniture will cost $7000 to replace. What is the actual cash value of the destroyed furniture? - Answer️️ -5000 Which of the following can be insured under an unendorsed Homeowners policy? a. Farm b. Mobile Home c. Dwelling that the owner rents to his cousin d. Private residence in which the owner occupant also maintains an office for her accounting business. - Answer️️ -d ©SOPHIABENNETT@ Saturday, August 24, 2024 8:52 AM 5 The primary purpose of the Business Income coverage forms is to reimburse the insured for - Answer️️ -loss of income resulting from property damage at the insureds property Coverage for sums an employer becomes legally obligated