ALABAMA PROPERTY AND CASUALTY
EXAM QUESTIONS WITH 100%
CORRECT ANSWERS | LATEST
VERSION 2025/2026.
If a company cancels an auto policy mid term, the refund will be made on
a. pro rata basis
b. short rate basis
c. retroactive basis
d. coinsurance basis - ANS Pro Rata Basis
What is the term used to describe terminating the insurance relationship at the end of the
policy period ?
a. cancellation
b. nonrenewal
c. separation
d. exclusion - ANS Nonrenewal
Which is the best example of an indirect loss ?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,a. sequential loss
b. liability loss
c. employee theft
d. loss of use - ANS Loss of Use
Which is a two party contract?
A. property
B. casualty
C. liability
D. auto - ANS Property
Insurance Contracts offset
a. speculative risk
b. pure risk
c. gambling
d. created risk - ANS Pure Risk
Which of the following is a third party contract ?
a. property
b. casualty
c. earthquake
d. theft - ANS Casualty
Risk is best defined as
a. chance of loss
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, b. certainty of loss
c. financially loss
d. sentimental loss - ANS Chance of loss
Being subject to a loss is
a. liability
b. indemnity
c . exposure
d. subrogation - ANS Exposure
The ranking insured in a personal lines contract is the
a. named insured
b. first named insured
c. mortgagee
d. husband - ANS Named Insured
To be paid under a P&C contract, insurable interest must exist
a. at the time of the application
b. on the policy date
c. at the time of the loss
d. at the time of claim settlement - ANS At the time of the loss
This type of company benefits the policyowners
a. stock
b. mutual
c. foreign
d. alien - ANS Mutual
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
EXAM QUESTIONS WITH 100%
CORRECT ANSWERS | LATEST
VERSION 2025/2026.
If a company cancels an auto policy mid term, the refund will be made on
a. pro rata basis
b. short rate basis
c. retroactive basis
d. coinsurance basis - ANS Pro Rata Basis
What is the term used to describe terminating the insurance relationship at the end of the
policy period ?
a. cancellation
b. nonrenewal
c. separation
d. exclusion - ANS Nonrenewal
Which is the best example of an indirect loss ?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,a. sequential loss
b. liability loss
c. employee theft
d. loss of use - ANS Loss of Use
Which is a two party contract?
A. property
B. casualty
C. liability
D. auto - ANS Property
Insurance Contracts offset
a. speculative risk
b. pure risk
c. gambling
d. created risk - ANS Pure Risk
Which of the following is a third party contract ?
a. property
b. casualty
c. earthquake
d. theft - ANS Casualty
Risk is best defined as
a. chance of loss
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, b. certainty of loss
c. financially loss
d. sentimental loss - ANS Chance of loss
Being subject to a loss is
a. liability
b. indemnity
c . exposure
d. subrogation - ANS Exposure
The ranking insured in a personal lines contract is the
a. named insured
b. first named insured
c. mortgagee
d. husband - ANS Named Insured
To be paid under a P&C contract, insurable interest must exist
a. at the time of the application
b. on the policy date
c. at the time of the loss
d. at the time of claim settlement - ANS At the time of the loss
This type of company benefits the policyowners
a. stock
b. mutual
c. foreign
d. alien - ANS Mutual
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
