Exam- Alabama Personal Lines Exam with Complete
Solutions
What is a hazard? Correct Answer-An increase in the possibility that a loss might occur
The purpose of insurance is to: Correct 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: Correct 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?
Correct Answer-Martha
Which of the following is not an element of insurability Correct 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 Correct Answer-Indemnity
, Exam- Alabama Personal Lines Exam with Complete
Solutions
An individual who owns and lives in a condominium can obtain broad coverage for personal
property in the condo under which homeowners form Correct Answer-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act Correct
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 Correct Answer-Foreign
The purpose of a binder is to Correct 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 Correct Answer-Replacement cost
minus appreciation
, Exam- Alabama Personal Lines Exam with Complete
Solutions
Which of the following can be insured under an unendorsed Homeowners policy? Correct
Answer-Private residence in which the owner occupant also maintains an office for her
accounting business
Which of the following coverages is included in the Homeowners policy but is NOT included in
an under endorsed Dwelling policy? Correct Answer-Liability
Open peril coverage for both the dwelling and personal property is provided by the:
Correct Answer-HO-5
Coverage for which of the following is excluded by a Dwelling policy? Correct Answer-Coin
Collection
Which of the following perils is covered by the HO-2 and HO-3? Correct Answer-Sudden
and the accidental rupture of a heating system
Under a pure no-fault plan, each party to an auto accident: Correct Answer-Is reimbursed
by his or her own insurance company
Solutions
What is a hazard? Correct Answer-An increase in the possibility that a loss might occur
The purpose of insurance is to: Correct 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: Correct 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?
Correct Answer-Martha
Which of the following is not an element of insurability Correct 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 Correct Answer-Indemnity
, Exam- Alabama Personal Lines Exam with Complete
Solutions
An individual who owns and lives in a condominium can obtain broad coverage for personal
property in the condo under which homeowners form Correct Answer-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act Correct
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 Correct Answer-Foreign
The purpose of a binder is to Correct 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 Correct Answer-Replacement cost
minus appreciation
, Exam- Alabama Personal Lines Exam with Complete
Solutions
Which of the following can be insured under an unendorsed Homeowners policy? Correct
Answer-Private residence in which the owner occupant also maintains an office for her
accounting business
Which of the following coverages is included in the Homeowners policy but is NOT included in
an under endorsed Dwelling policy? Correct Answer-Liability
Open peril coverage for both the dwelling and personal property is provided by the:
Correct Answer-HO-5
Coverage for which of the following is excluded by a Dwelling policy? Correct Answer-Coin
Collection
Which of the following perils is covered by the HO-2 and HO-3? Correct Answer-Sudden
and the accidental rupture of a heating system
Under a pure no-fault plan, each party to an auto accident: Correct Answer-Is reimbursed
by his or her own insurance company
