KENTUCKY PROPERTY AND CASUALTY
INSURANCE TEST BANK WITH 100% CORRECT
ANSWERS | VERIFIED AND UPDATED 2026
◉ Which of the following is NOT a defense against negligence?
a) contributory negligence
b) statues of limitations
c) presumption of negligence
d) assumption of risk. Answer: c) presumption of negligence
◉ The presumed authority necessary to carry out the producer's
routine tasks is known as:
a) expressed authority
b) implied authority. Answer: b) implied authority
◉ Which of the following statements regarding the Towing and
Labor endorsement is false?
a) it will pay to the limit stated in the endorsement each time a
covered vehicle is disabled
b) there is no coverage for roadside labor costs
c) there is no deductible
,d) none of the above. Answer: b) there is no coverage for roadside
labor costs
◉ A licensee may violate federal law and be subject to a fine and
prison for doing which of the following?
a) selling insurance w/ a nonresident license
b) sending threatening letters to the state insurance regulator
c) fraudulently telling an insured a claim isn't covered on the policy
d) murdering an applicant. Answer: b) sending threatening letters to
the state insurance regulator
◉ Which of the following is not an insured location for liability
coverage under the homeowners policy?
a) a restaurant party room the insured has rented for a business
meeting
b) the insured's cemetery plot
c) a restaurant party room the insured has rented for a birthday
party
d) vacant land owned by the insured. Answer: a) a restaurant party
room the insured has rented for a business meeting
◉ Special covers each of the following EXCEPT:
a) theft
b) mysterious disappearance
, c) Acts of God
d) floods and earthquakes. Answer: d) floods and earthquakes
◉ Sam has underinsured motorist coverage with limits of
$100/$300. Sam is injured by Quincy who has limits of $50/$100.
Sam's injuries are valued at $125,000. Sam's underinsured motorist
coverage will pay;
a) $25,000
b) $50,000
c) $75,000
d) $125,000. Answer: b) $50,000
◉ The contract agreement may be referred as the:
a) legal interest test
b) good faith
c) meeting of the minds
d) promise of indemnification. Answer: c) meeting of the minds
◉ Which of the following boats owned by the insured would require
the HO watercraft endorsement for liability coverage?
a) a boat with 25 horsepower outboard engine
b) a sailboat with 25 ft. in length
c) a boat with a 15 horsepower inboard motor
INSURANCE TEST BANK WITH 100% CORRECT
ANSWERS | VERIFIED AND UPDATED 2026
◉ Which of the following is NOT a defense against negligence?
a) contributory negligence
b) statues of limitations
c) presumption of negligence
d) assumption of risk. Answer: c) presumption of negligence
◉ The presumed authority necessary to carry out the producer's
routine tasks is known as:
a) expressed authority
b) implied authority. Answer: b) implied authority
◉ Which of the following statements regarding the Towing and
Labor endorsement is false?
a) it will pay to the limit stated in the endorsement each time a
covered vehicle is disabled
b) there is no coverage for roadside labor costs
c) there is no deductible
,d) none of the above. Answer: b) there is no coverage for roadside
labor costs
◉ A licensee may violate federal law and be subject to a fine and
prison for doing which of the following?
a) selling insurance w/ a nonresident license
b) sending threatening letters to the state insurance regulator
c) fraudulently telling an insured a claim isn't covered on the policy
d) murdering an applicant. Answer: b) sending threatening letters to
the state insurance regulator
◉ Which of the following is not an insured location for liability
coverage under the homeowners policy?
a) a restaurant party room the insured has rented for a business
meeting
b) the insured's cemetery plot
c) a restaurant party room the insured has rented for a birthday
party
d) vacant land owned by the insured. Answer: a) a restaurant party
room the insured has rented for a business meeting
◉ Special covers each of the following EXCEPT:
a) theft
b) mysterious disappearance
, c) Acts of God
d) floods and earthquakes. Answer: d) floods and earthquakes
◉ Sam has underinsured motorist coverage with limits of
$100/$300. Sam is injured by Quincy who has limits of $50/$100.
Sam's injuries are valued at $125,000. Sam's underinsured motorist
coverage will pay;
a) $25,000
b) $50,000
c) $75,000
d) $125,000. Answer: b) $50,000
◉ The contract agreement may be referred as the:
a) legal interest test
b) good faith
c) meeting of the minds
d) promise of indemnification. Answer: c) meeting of the minds
◉ Which of the following boats owned by the insured would require
the HO watercraft endorsement for liability coverage?
a) a boat with 25 horsepower outboard engine
b) a sailboat with 25 ft. in length
c) a boat with a 15 horsepower inboard motor
