PERSONAL LINES INSURANCE TEST WITH 100- CORRECT SOLUTIONS

Personal Lines Insurance Test With 100% b b b b b




Correct Solutions b b




Risk _________ is when one takes action to prevent or reduce potential loss. -
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correct answer-Reduction
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When the number of similar units increases, the predictability of the loss improves
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according to the rule of _____ ________. - correct answer-Large Numbers
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The insuring of risks that are more prone to losses than average risks is known as?
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- correct answer-Adverse Selection
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A ___________ contract is an arrangement where one insurer transfers or shares
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risks with another insurer. - correct answer-Reinsurance
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_____________ Reinsurance is accepted or rejected by a case by case basis. - v
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correct answer-Facultative
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The fact that an insured would profit from a loss, would be a violation of the
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principle of ___________. - correct answer-Indemnity
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The determination of acceptable risks is the primary function of the ___________ . -
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bcorrect answer-Underwriter
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Underwriters like to select insureds who's actual losses will be similar to expected
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losses. True or False? - correct answer-True
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When rates cannot be used until they are improved by the department or division of
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insurance, they are called ____ ________ rates. - correct answer-Prior Approval
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The termination of a policy by either the insured or insurer before its expiration date
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is known as ___________. - correct answer-Cancellation
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,When the insurer cancels a property policy, the unearned premium is returned ___
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____. - correct answer-Pro Rata
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When an insured requests cancellation of a policy, the unearned premium is
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refunded to the insured on a _____ _____. - correct answer-Short Rate
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A fire is considered to be a _____ of a potential loss. - correct answer-Cause
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A document that provides temporary insurance coverage until a policy is issued is
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known as a ______. - correct answer-Binder
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The process by which a disputed claim is decided by a neutral third party is known
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as ___________. - correct answer-Arbitration
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_________ _________ is a situation where there are two causes resulting in a loss, v
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with one of the causes excluded and the other cause of loss not excluded. -
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correct answer-Concurrent Causation
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If two or more policies provide identical coverage for the same risk, the policies are
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Policy A is written for $100,000, and an excess Policy B is written for $200,000 on
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the same property. In the event of a $20,000 loss, how much will each policy pay? -
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bcorrect answer-A= $20,000 ; B= $0
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A building that has neither occupants nor personal property is ______. - correct
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answer-Vacant
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When property is damaged by fire, the loss is said to be a(n) ______ loss. - correct
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answer-Direct
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If a fire on a premises caused a power outage, which caused meat in the freezer to
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bspoil, would the meat spoilage be considered a direct loss or indirect loss? -
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Open peril policies include losses caused by theft. True or False? - correct answer-
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True

If a property owner does not desire any deduction for depreciation following a
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bcovered loss, he/she should purchase a ___________ ____ policy. - correct
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For replacement cost coverage to apply in dwelling policies, the insured must carry
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insurance at least equal to ____% of the cost of replacement of the building. -
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correct answer-80
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Would a stated amount method of valuation likely be used when insuring gold
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bullion? - correct answer-No
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, An ____ policy is one that the value of the subject matter is not agreed upon, but is
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left to be ascertained in case of loss. - correct answer-Open
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A valued policy is one that expresses on it's face an agreement that the thing
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insured is valued at a specific sum. True or False? - correct answer-True
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Insuring more than one property on one policy for a single amount of insurance that
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bapplies to all properties covered under the policy is known as _______ coverage. -
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The name of the insured is found on the declarations page of the policy. True or
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False? - correct answer-True
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What part or portion of a property policy contains the effective or expiration dates of
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the policy? - correct answer-Declarations
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Are the insurer's limits of insurance amount stated in the conditions part or portion
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part of the policy? - correct answer-No
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The __________ part or portion of a property policy sets forth the rights, rules,
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duties, and obligations of the insurer and insured to be followed throughout the
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policy period. - correct answer-Conditions
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The ______________ Clause allows insurers to automatically broaden coverage
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without endorsement on existing policies with no increase in premium. - correct
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answer-Liberalization
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When a property policy has been in effect less than 60 days and the insurer cancels
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for the nonpayment of premium, the insurer must give the insured ____ days
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written notice. - correct answer-10
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Could an order to vacate the property possibly cause an insurer to cancel a
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commercial property policy? - correct answer-Yes
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An insurer may nonrenew a homeowners policy with oral notice to the insured. True
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or False? - correct answer-False
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The insured's transfer of right of ownership or interest in an insurance policy to
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another party with the insurer's written consent is known as an __________. -
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correct answer-Assignment
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___________ transfers an insured's legal right of recovery to the insurer that paid v
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the claim. - correct answer-Subrogation
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When an insured suffers a loss, they are required to prepare an inventory of the
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damaged property at the ________ request. - correct answer-Insurers
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In the event of a loss under a homeowners policy, a proof of loss must be signed
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band sworn by the _______. - correct answer-Insured
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