personal lines insurance 2025/2026 QUESTIONS AND ANSWERS
GUARANTEE A+
When the insurer cancels a property policy, the unearned premium is returned ___ ____. - Pro
Rata
When an insured requests cancellation of a policy, the unearned premium is refunded to the
insured on a _____ _____. - Short Rate
A fire is considered to be a _____ of a potential loss. - Cause
A document that provides temporary insurance coverage until a policy is issued is known as a
______. - Binder
The process by which a disputed claim is decided by a neutral third party is known as
___________. - Arbitration
_________ _________ is a situation where there are two causes resulting in a loss, with one of
the causes excluded and the other cause of loss not excluded. - Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are deemed to
be __________. - Concurrent
Policy A is written for $100,000, and an excess Policy B is written for $200,000 on the same
property. In the event of a $20,000 loss, how much will each policy pay? - A= $20,000 ; B= $0
A building that has neither occupants nor personal property is ______. - Vacant
When property is damaged by fire, the loss is said to be a(n) ______ loss. - Direct
,If a fire on a premises caused a power outage, which caused meat in the freezer to spoil, would
the meat spoilage be considered a direct loss or indirect loss? - Indirect Loss
Open peril policies include losses caused by theft. True or False? - True
If a property owner does not desire any deduction for depreciation following a covered loss,
he/she should purchase a ___________ ____ policy. - Replacement Cost
For replacement cost coverage to apply in dwelling policies, the insured must carry insurance at
least equal to ____% of the cost of replacement of the building. - 80
Would a stated amount method of valuation likely be used when insuring gold bullion? - No
An ____ policy is one that the value of the subject matter is not agreed upon, but is left to be
ascertained in case of loss. - Open
A valued policy is one that expresses on it's face an agreement that the thing insured is valued at
a specific sum. True or False? - True
Insuring more than one property on one policy for a single amount of insurance that applies to all
properties covered under the policy is known as _______ coverage. - Blanket
The name of the insured is found on the declarations page of the policy. True or False? - True
What part or portion of a property policy contains the effective or expiration dates of the policy?
- Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part of the
policy? - No
, The __________ part or portion of a property policy sets forth the rights, rules, duties, and
obligations of the insurer and insured to be followed throughout the policy period. - Conditions
The ______________ Clause allows insurers to automatically broaden coverage without
endorsement on existing policies with no increase in premium. - Liberalization
When a property policy has been in effect less than 60 days and the insurer cancels for the
nonpayment of premium, the insurer must give the insured ____ days written notice. - 10
Could an order to vacate the property possibly cause an insurer to cancel a commercial property
policy? - Yes
An insurer may nonrenew a homeowners policy with oral notice to the insured. True or False? -
False
The insured's transfer of right of ownership or interest in an insurance policy to another party
with the insurer's written consent is known as an __________. - Assignment
___________ transfers an insured's legal right of recovery to the insurer that paid the claim. -
Subrogation
When an insured suffers a loss, they are required to prepare an inventory of the damaged
property at the ________ request. - Insurers
In the event of a loss under a homeowners policy, a proof of loss must be signed and sworn by
the _______. - Insured
Company A has issued a policy in the amount of $200,000, and company B has issued a policy in
the amount of $300,000. under the other insurance or pro rata liability condition or provision,
how much will company A pay of a $100,000 loss? - $40,000
GUARANTEE A+
When the insurer cancels a property policy, the unearned premium is returned ___ ____. - Pro
Rata
When an insured requests cancellation of a policy, the unearned premium is refunded to the
insured on a _____ _____. - Short Rate
A fire is considered to be a _____ of a potential loss. - Cause
A document that provides temporary insurance coverage until a policy is issued is known as a
______. - Binder
The process by which a disputed claim is decided by a neutral third party is known as
___________. - Arbitration
_________ _________ is a situation where there are two causes resulting in a loss, with one of
the causes excluded and the other cause of loss not excluded. - Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are deemed to
be __________. - Concurrent
Policy A is written for $100,000, and an excess Policy B is written for $200,000 on the same
property. In the event of a $20,000 loss, how much will each policy pay? - A= $20,000 ; B= $0
A building that has neither occupants nor personal property is ______. - Vacant
When property is damaged by fire, the loss is said to be a(n) ______ loss. - Direct
,If a fire on a premises caused a power outage, which caused meat in the freezer to spoil, would
the meat spoilage be considered a direct loss or indirect loss? - Indirect Loss
Open peril policies include losses caused by theft. True or False? - True
If a property owner does not desire any deduction for depreciation following a covered loss,
he/she should purchase a ___________ ____ policy. - Replacement Cost
For replacement cost coverage to apply in dwelling policies, the insured must carry insurance at
least equal to ____% of the cost of replacement of the building. - 80
Would a stated amount method of valuation likely be used when insuring gold bullion? - No
An ____ policy is one that the value of the subject matter is not agreed upon, but is left to be
ascertained in case of loss. - Open
A valued policy is one that expresses on it's face an agreement that the thing insured is valued at
a specific sum. True or False? - True
Insuring more than one property on one policy for a single amount of insurance that applies to all
properties covered under the policy is known as _______ coverage. - Blanket
The name of the insured is found on the declarations page of the policy. True or False? - True
What part or portion of a property policy contains the effective or expiration dates of the policy?
- Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part of the
policy? - No
, The __________ part or portion of a property policy sets forth the rights, rules, duties, and
obligations of the insurer and insured to be followed throughout the policy period. - Conditions
The ______________ Clause allows insurers to automatically broaden coverage without
endorsement on existing policies with no increase in premium. - Liberalization
When a property policy has been in effect less than 60 days and the insurer cancels for the
nonpayment of premium, the insurer must give the insured ____ days written notice. - 10
Could an order to vacate the property possibly cause an insurer to cancel a commercial property
policy? - Yes
An insurer may nonrenew a homeowners policy with oral notice to the insured. True or False? -
False
The insured's transfer of right of ownership or interest in an insurance policy to another party
with the insurer's written consent is known as an __________. - Assignment
___________ transfers an insured's legal right of recovery to the insurer that paid the claim. -
Subrogation
When an insured suffers a loss, they are required to prepare an inventory of the damaged
property at the ________ request. - Insurers
In the event of a loss under a homeowners policy, a proof of loss must be signed and sworn by
the _______. - Insured
Company A has issued a policy in the amount of $200,000, and company B has issued a policy in
the amount of $300,000. under the other insurance or pro rata liability condition or provision,
how much will company A pay of a $100,000 loss? - $40,000
