Alabama Personal Lines Exam
What is a hazard? - Answer-An increase in the possibility that a loss might occur
The purpose of insurance is to: - 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: - 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? - Answer-Martha
Which of the following is not an element of insurability - 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 - Answer-Indemnity
An individual who owns and lives in a condominium can obtain broad coverage for personal property in
the condo under which homeowners form - Answer-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act - 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 - Answer-Foreign
The purpose of a binder is to - 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 - Answer-Replacement cost minus appreciation
Which of the following can be insured under an unendorsed Homeowners policy? - 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? - Answer-Liability
Open peril coverage for both the dwelling and personal property is provided by the: - Answer-HO-5
Coverage for which of the following is excluded by a Dwelling policy? - Answer-Coin Collection
Which of the following perils is covered by the HO-2 and HO-3? - Answer-Sudden and the accidental
rupture of a heating system
Under a pure no-fault plan, each party to an auto accident: - Answer-Is reimbursed by his or her own
insurance company
An additional loss that results from a direct loss to property is called a/an: -
Answer-Indirect/consequential loss
Assume the following items were stolen from the insureds home. Which one of these losses would be
fully covered under Coverage C of the Homeowners policy, assuming the loss was for the full value of
What is a hazard? - Answer-An increase in the possibility that a loss might occur
The purpose of insurance is to: - 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: - 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? - Answer-Martha
Which of the following is not an element of insurability - 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 - Answer-Indemnity
An individual who owns and lives in a condominium can obtain broad coverage for personal property in
the condo under which homeowners form - Answer-HO-6
And insurance what is the primary purpose for the Fair Credit Reporting Act - 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 - Answer-Foreign
The purpose of a binder is to - 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 - Answer-Replacement cost minus appreciation
Which of the following can be insured under an unendorsed Homeowners policy? - 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? - Answer-Liability
Open peril coverage for both the dwelling and personal property is provided by the: - Answer-HO-5
Coverage for which of the following is excluded by a Dwelling policy? - Answer-Coin Collection
Which of the following perils is covered by the HO-2 and HO-3? - Answer-Sudden and the accidental
rupture of a heating system
Under a pure no-fault plan, each party to an auto accident: - Answer-Is reimbursed by his or her own
insurance company
An additional loss that results from a direct loss to property is called a/an: -
Answer-Indirect/consequential loss
Assume the following items were stolen from the insureds home. Which one of these losses would be
fully covered under Coverage C of the Homeowners policy, assuming the loss was for the full value of
