Alabama Personal Lines Exam Questions &
Answers | Updated 2026
Which Homeowner's policy provides all risk or open peril coverage on the dwelling but broad form
coverage on the personal property? - CORRECT ANSWER -HO-3
The HO-4 is basically intended to cover which of the following types of risks? - CORRECT
ANSWER -An apartment-dweller's personal property
An individual otherwise qualified except for having taken and passed the examination can be
issued a temporary insurance producer license, which is valid for a maximum period of -
CORRECT ANSWER -six months
Who of the following would have Liability coverage under Chuck's Personal Auto policy? -
CORRECT ANSWER -All of the above
The authority given by the company to the agent is NOT formally written or communicated is
called - CORRECT ANSWER -implied authority
Which of the following correctly identifies common characteristics of Fidelity Bonds? - CORRECT
ANSWER -Fidelity Bonds commonly provide coverage for an insured act occurring during the
bond period and discovered before the end of the discovery period.
An automobile collision would be considered - CORRECT ANSWER -an accident and an
occurrence
Which of the following are excluded property losses under all Homeowner's forms? - CORRECT
ANSWER -All of the above
,What type of Ocean Marine insurance covers goods while they are in transit over water? -
CORRECT ANSWER -cargo
Under the Personal Auto policy, Uninsured Motorists coverage provides coverage for bodily injury
for which the insured is legally entitled to recover that results from an accident with - CORRECT
ANSWER -all of the above
Which of the following statements about notice of cancellation of an Alabama automobile polity
is CORRECT? - CORRECT ANSWER -For reasons other than non-payment of premium, the
insurer must provide at least 20 days notice of cancellation of an automobile policy.
Assume the following items were stolen from the insured's home. Which one of the these losses
would be fully covered under Coverage C (Personal Property) of the Homeowner's policy,
assuming the loss was for the full value of the property described? - CORRECT ANSWER -A
$1,000 emerald bracelet
Which Homeowner's coverage provides indirect loss coverage? - CORRECT ANSWER -Coverage
D (Loss of Use)
Coverage D under a standard Homeowner's policy contains coverage for - CORRECT ANSWER -
loss of use
All of the following are correct statements regarding coverage under a Boatowner's policy EXCEPT
- CORRECT ANSWER -Most Boatowner's policies have no limitations or exclusions related to
how the boat may be used.
To file a claim for coverage under Part B (Med Pay) of the Personal Auto policy, the claimant -
CORRECT ANSWER -must incur expenses within three years of the accident
, Xavier's car is insured by ABC Insurance Company. Xavier took out a loan with First City Bank to
purchase the car, and is still making payments on the car loan. Who has an insurable interest in
the car? - CORRECT ANSWER -Xavier and First City Bank
Historically, which of the following statements regarding Ocean Marine Insurance is correct? -
CORRECT ANSWER -Most marine policies are written on a standard form basis
Which of the following losses would be EXCLUDED under the Liability section of a Personal Auto
policy? - CORRECT ANSWER -The insured backs out of her garage and runs over her son's new
10-speed bike.
Which of the following perils are NOT covered by the Equipment Breakdown Coverage policy? -
CORRECT ANSWER -
Under the NFIP policy, all of the following are generally considered to be floods EXCEPT -
CORRECT ANSWER -sewer backup
In a Fidelity Bond, the employee is known as the - CORRECT ANSWER -
Which of the following is NOT a standard exclusion found in Section II (Liability) of a
Homeowner's policy? - CORRECT ANSWER -
When does Flood insurance begin? - CORRECT ANSWER -30 days after the application date
Under a standard property insurance policy, after the insurer pays in full for damaged property,
they gain ownership of the property and have the right to recoup part of their payment through the
right of - CORRECT ANSWER -salvage
Answers | Updated 2026
Which Homeowner's policy provides all risk or open peril coverage on the dwelling but broad form
coverage on the personal property? - CORRECT ANSWER -HO-3
The HO-4 is basically intended to cover which of the following types of risks? - CORRECT
ANSWER -An apartment-dweller's personal property
An individual otherwise qualified except for having taken and passed the examination can be
issued a temporary insurance producer license, which is valid for a maximum period of -
CORRECT ANSWER -six months
Who of the following would have Liability coverage under Chuck's Personal Auto policy? -
CORRECT ANSWER -All of the above
The authority given by the company to the agent is NOT formally written or communicated is
called - CORRECT ANSWER -implied authority
Which of the following correctly identifies common characteristics of Fidelity Bonds? - CORRECT
ANSWER -Fidelity Bonds commonly provide coverage for an insured act occurring during the
bond period and discovered before the end of the discovery period.
An automobile collision would be considered - CORRECT ANSWER -an accident and an
occurrence
Which of the following are excluded property losses under all Homeowner's forms? - CORRECT
ANSWER -All of the above
,What type of Ocean Marine insurance covers goods while they are in transit over water? -
CORRECT ANSWER -cargo
Under the Personal Auto policy, Uninsured Motorists coverage provides coverage for bodily injury
for which the insured is legally entitled to recover that results from an accident with - CORRECT
ANSWER -all of the above
Which of the following statements about notice of cancellation of an Alabama automobile polity
is CORRECT? - CORRECT ANSWER -For reasons other than non-payment of premium, the
insurer must provide at least 20 days notice of cancellation of an automobile policy.
Assume the following items were stolen from the insured's home. Which one of the these losses
would be fully covered under Coverage C (Personal Property) of the Homeowner's policy,
assuming the loss was for the full value of the property described? - CORRECT ANSWER -A
$1,000 emerald bracelet
Which Homeowner's coverage provides indirect loss coverage? - CORRECT ANSWER -Coverage
D (Loss of Use)
Coverage D under a standard Homeowner's policy contains coverage for - CORRECT ANSWER -
loss of use
All of the following are correct statements regarding coverage under a Boatowner's policy EXCEPT
- CORRECT ANSWER -Most Boatowner's policies have no limitations or exclusions related to
how the boat may be used.
To file a claim for coverage under Part B (Med Pay) of the Personal Auto policy, the claimant -
CORRECT ANSWER -must incur expenses within three years of the accident
, Xavier's car is insured by ABC Insurance Company. Xavier took out a loan with First City Bank to
purchase the car, and is still making payments on the car loan. Who has an insurable interest in
the car? - CORRECT ANSWER -Xavier and First City Bank
Historically, which of the following statements regarding Ocean Marine Insurance is correct? -
CORRECT ANSWER -Most marine policies are written on a standard form basis
Which of the following losses would be EXCLUDED under the Liability section of a Personal Auto
policy? - CORRECT ANSWER -The insured backs out of her garage and runs over her son's new
10-speed bike.
Which of the following perils are NOT covered by the Equipment Breakdown Coverage policy? -
CORRECT ANSWER -
Under the NFIP policy, all of the following are generally considered to be floods EXCEPT -
CORRECT ANSWER -sewer backup
In a Fidelity Bond, the employee is known as the - CORRECT ANSWER -
Which of the following is NOT a standard exclusion found in Section II (Liability) of a
Homeowner's policy? - CORRECT ANSWER -
When does Flood insurance begin? - CORRECT ANSWER -30 days after the application date
Under a standard property insurance policy, after the insurer pays in full for damaged property,
they gain ownership of the property and have the right to recoup part of their payment through the
right of - CORRECT ANSWER -salvage
