Alabama Personal Lines Insurance Exam Test
Bank Latest 2025 With 500 Practice Questions
and Correct Answers| Alabama Personal Lines
Test 2025-2026 Preparation Test bank (new!)
The Alabama insurance guaranty association is obligated to cover the claims of an
insolvent property and causality insurer that are in excess of
$100
Which one of the following is used to modify the coverage provided under an
insurance policy?
endorsement
The insured under a property insurance policy must carry insurance equal to a
specified percentage of the property's value to qualify for replacement cost
coverage. This is an example of the
Coinsurance clause
Under Alabama Law an insurer can cancel an automobile policy for any reason
except
paying the insurance policy on time
Hank, who is the named insured under a Personal Auto policy, borrows a
neighbor's car and hits a parked car while driving the neighbor's auto. The neighbor
is also insured under a Personal Auto policy. Whose policy would provide Liability
coverage for this loss?
The neighbor's Personal Auto policy would be primary; Hank's policy would apply
on an excess basis.
Which statement regarding insurance producer license appointments is TRUE?
a licensed insurance producer must be licensed and appointed by the insurer to act
as the insurers agent
pg. 1
,In Alabama, The Commissioner of Insurance may hold a hearing upon written
demand by an aggrieved person within _________days after receipt of demand.
30
Who must meet Alabama's requirement to earn 24 hours of continuing education
hours every two years?
a producer who only sells property and casualty insurance
Statement about notice of cancellation of an Alabama automobile policy?
For reasons other than non-payment of premium the insurer must provide at least
20-days notice of cancellation of an automobile policy
In addition to paying legal damages the personal auto policy will pay for?
A. Premiums on appeal bonds
B. Cost of defense
C. Reasonable expenses incurred by the insured at the company's request
D. All of the above
Answer: D
A flood would not be a covered loss in an unendorsed homeowners policy in which
section of the policy would a named insured locate the information?
Exclusions
Your license may be refused, suspended or revoked for any of the following
actions EXCEPT:
Receiving too many unwarranted consumer complaints
Frank owns a power boat with a 100 horsepower motor. Which is true of Frank's
coverage for the boat under his homeowners policy?
A. Frank would have no property of liability coverage for the boat
B. Frank would have $1000 property cover and limited liability coverage
C. Frank would have $1500 property coverage for the boat but no liability
coverage
D. Frank would have both property and liability coverage for the boat
Answer: C
pg. 2
,Every automobile insurance policy sold in Alabama must _________coverage for
uninsured motorist
offer
An insurance producer must inform the Alabama Commissioner of Insurance of
administrative action against the producer by another governmental agency
within_____ days of its final resolution.
30
The insured purchased her television set three years ago for $500. At the time of a
fire loss it had depreciated by $200. It would cost $600 to by a replacement. What
is the actual cash value of the destroyed television?
$400 [600-200=400]
A mutual insurance company ? is owned and controlled by its policyholders and
managed by directors chosen by the policyholders
Under the dwelling policy, personal property away from the premises anywhere in
the world
is covered for up to 10% of the amount of coverage for personal property.
Which of the following is NOT correct regarding the Defense Conditions under the
Equipment Breakdown Coverage policy?
Defense costs are included in the policy limits
The Broad Cause of Loss form for Homeowner's policies includes the Additional
Coverage of
collapse
You are held responsible when you 13-year-old daughter vandalizes a neighbor's
house. This is an example of
Vicarious liability
Providing misleading comparisons of the terms and benefits of an insurance policy
for the purpose of inducing the policyholder to change to another policy is known
as
pg. 3
, twisting
The definition of "Casualty" insurance includes
liability insurance
Which of the following is NOT a Supplementary Payment under a Personal Auto
policy?
Premiums on any bonds required (only pay up to 200)
Which of the following is normally NOT an exclusion under the Equipment
Breakdown Coverage policy?
internal explosions
Which of the following is a peril
Hail
An insured who needs coverage for her home and its contents against loss caused
by earthquake can obtain it with
either a separate Earthquake policy or a Dwelling or Homeowner's policy with an
Earthquake endorsement attached.
Which of the following is INCORRECT concerning premiums collected by an
insurance producer in Alabama?
Premium payments become the property of the producer
Which of the following statements is NOT true?
A. A sealed roof deck can be achieved in both new and existing homes
B. A homeowner must be reroofing in order to achieve a sealed roof deck on an
existing home
C. Sealing the roof deck is a critical part of achieving FORTIFIED Home
designations
D. The Bronze level of FORTIFIED is focused on strengthening the roof system
and keeping water out of the home
A homeowner must be reroofing in order to achieve a sealed roof deck on an
existing home
Under the NFIP all of the following are generally considered to be floods EXCEPT
A. mudslide
pg. 4
Bank Latest 2025 With 500 Practice Questions
and Correct Answers| Alabama Personal Lines
Test 2025-2026 Preparation Test bank (new!)
The Alabama insurance guaranty association is obligated to cover the claims of an
insolvent property and causality insurer that are in excess of
$100
Which one of the following is used to modify the coverage provided under an
insurance policy?
endorsement
The insured under a property insurance policy must carry insurance equal to a
specified percentage of the property's value to qualify for replacement cost
coverage. This is an example of the
Coinsurance clause
Under Alabama Law an insurer can cancel an automobile policy for any reason
except
paying the insurance policy on time
Hank, who is the named insured under a Personal Auto policy, borrows a
neighbor's car and hits a parked car while driving the neighbor's auto. The neighbor
is also insured under a Personal Auto policy. Whose policy would provide Liability
coverage for this loss?
The neighbor's Personal Auto policy would be primary; Hank's policy would apply
on an excess basis.
Which statement regarding insurance producer license appointments is TRUE?
a licensed insurance producer must be licensed and appointed by the insurer to act
as the insurers agent
pg. 1
,In Alabama, The Commissioner of Insurance may hold a hearing upon written
demand by an aggrieved person within _________days after receipt of demand.
30
Who must meet Alabama's requirement to earn 24 hours of continuing education
hours every two years?
a producer who only sells property and casualty insurance
Statement about notice of cancellation of an Alabama automobile policy?
For reasons other than non-payment of premium the insurer must provide at least
20-days notice of cancellation of an automobile policy
In addition to paying legal damages the personal auto policy will pay for?
A. Premiums on appeal bonds
B. Cost of defense
C. Reasonable expenses incurred by the insured at the company's request
D. All of the above
Answer: D
A flood would not be a covered loss in an unendorsed homeowners policy in which
section of the policy would a named insured locate the information?
Exclusions
Your license may be refused, suspended or revoked for any of the following
actions EXCEPT:
Receiving too many unwarranted consumer complaints
Frank owns a power boat with a 100 horsepower motor. Which is true of Frank's
coverage for the boat under his homeowners policy?
A. Frank would have no property of liability coverage for the boat
B. Frank would have $1000 property cover and limited liability coverage
C. Frank would have $1500 property coverage for the boat but no liability
coverage
D. Frank would have both property and liability coverage for the boat
Answer: C
pg. 2
,Every automobile insurance policy sold in Alabama must _________coverage for
uninsured motorist
offer
An insurance producer must inform the Alabama Commissioner of Insurance of
administrative action against the producer by another governmental agency
within_____ days of its final resolution.
30
The insured purchased her television set three years ago for $500. At the time of a
fire loss it had depreciated by $200. It would cost $600 to by a replacement. What
is the actual cash value of the destroyed television?
$400 [600-200=400]
A mutual insurance company ? is owned and controlled by its policyholders and
managed by directors chosen by the policyholders
Under the dwelling policy, personal property away from the premises anywhere in
the world
is covered for up to 10% of the amount of coverage for personal property.
Which of the following is NOT correct regarding the Defense Conditions under the
Equipment Breakdown Coverage policy?
Defense costs are included in the policy limits
The Broad Cause of Loss form for Homeowner's policies includes the Additional
Coverage of
collapse
You are held responsible when you 13-year-old daughter vandalizes a neighbor's
house. This is an example of
Vicarious liability
Providing misleading comparisons of the terms and benefits of an insurance policy
for the purpose of inducing the policyholder to change to another policy is known
as
pg. 3
, twisting
The definition of "Casualty" insurance includes
liability insurance
Which of the following is NOT a Supplementary Payment under a Personal Auto
policy?
Premiums on any bonds required (only pay up to 200)
Which of the following is normally NOT an exclusion under the Equipment
Breakdown Coverage policy?
internal explosions
Which of the following is a peril
Hail
An insured who needs coverage for her home and its contents against loss caused
by earthquake can obtain it with
either a separate Earthquake policy or a Dwelling or Homeowner's policy with an
Earthquake endorsement attached.
Which of the following is INCORRECT concerning premiums collected by an
insurance producer in Alabama?
Premium payments become the property of the producer
Which of the following statements is NOT true?
A. A sealed roof deck can be achieved in both new and existing homes
B. A homeowner must be reroofing in order to achieve a sealed roof deck on an
existing home
C. Sealing the roof deck is a critical part of achieving FORTIFIED Home
designations
D. The Bronze level of FORTIFIED is focused on strengthening the roof system
and keeping water out of the home
A homeowner must be reroofing in order to achieve a sealed roof deck on an
existing home
Under the NFIP all of the following are generally considered to be floods EXCEPT
A. mudslide
pg. 4
