PERSONAL LINES FINAL 2025/26 EXAM QUESTIONS WITH 100% CORRECT
ANSWERS!
Statements made in the application are considered:
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above - -B. Representations
--The definition of Risk is:
A. Uncertainty regarding loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unforseen damage to property for gain or profit - -A. Uncertainty regarding loss
--A financial device for transferring or shifting risk from an individual or entity to a large group with
the same risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance - -D. Insurance
--Hazards include which of the following:
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insurance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2 - -C. Both 1 & 2
,--The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying a premium
2. Guarantees claim payments will be divided as the interests of the insurance and mortgagee
appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2 - -C. Both 1 & 2
--Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's property
D. Owning property - -A. Being named in someone's will as an heir
--The plumbing in Mrs. Ward's home suddenly burst and the ceilings were damaged by water. Which
of the following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7` - -B. HO2
--Nicole has a Personal Auto policy with limits of 10/20/10 for liability coverage. She causes an
accident that results in $12,000 bodily injury damages to the other driver and $5,000 in property
damage to the other driver's car. How much would Nicole's policy pay for the the BI and PD losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000 - -A. $15,000
, --Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance. Agent Dufus explains to Ms.
Smith that flood coverage can be purchased directly through the NFIP or through him. Should Ms.
Smith choose to purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above - -A. Write your own program
--The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses - -D. The number of insureds, the
easier it is to estimate their losses
--A sudden, unintended, and unexpected event is known as:
A. Negligence
B. Warranty
C. Accident
D. Occurrence - -C. Accident
--The Commissioner of Insurance in the State of Indiana is appointed by which of the following:
A. The chairman of the Banking & Insurance Commission
B. He is not appointed, but elected
C. The Attorney General
D. The Governor - -D. The Governor
ANSWERS!
Statements made in the application are considered:
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above - -B. Representations
--The definition of Risk is:
A. Uncertainty regarding loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unforseen damage to property for gain or profit - -A. Uncertainty regarding loss
--A financial device for transferring or shifting risk from an individual or entity to a large group with
the same risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance - -D. Insurance
--Hazards include which of the following:
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insurance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2 - -C. Both 1 & 2
,--The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying a premium
2. Guarantees claim payments will be divided as the interests of the insurance and mortgagee
appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2 - -C. Both 1 & 2
--Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's property
D. Owning property - -A. Being named in someone's will as an heir
--The plumbing in Mrs. Ward's home suddenly burst and the ceilings were damaged by water. Which
of the following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7` - -B. HO2
--Nicole has a Personal Auto policy with limits of 10/20/10 for liability coverage. She causes an
accident that results in $12,000 bodily injury damages to the other driver and $5,000 in property
damage to the other driver's car. How much would Nicole's policy pay for the the BI and PD losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000 - -A. $15,000
, --Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance. Agent Dufus explains to Ms.
Smith that flood coverage can be purchased directly through the NFIP or through him. Should Ms.
Smith choose to purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above - -A. Write your own program
--The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses - -D. The number of insureds, the
easier it is to estimate their losses
--A sudden, unintended, and unexpected event is known as:
A. Negligence
B. Warranty
C. Accident
D. Occurrence - -C. Accident
--The Commissioner of Insurance in the State of Indiana is appointed by which of the following:
A. The chairman of the Banking & Insurance Commission
B. He is not appointed, but elected
C. The Attorney General
D. The Governor - -D. The Governor
