Alabama Property and Casualty Exam
Questions with Verified Correct Answers 2026
Update
If a company cancels an auto policy mid term, the refund will be made on
a. pro rata basis
b. short rate basis
c. retroactive basis
d. coinsurance basis - CORRECT ANSWER -Pro Rata Basis
What is the term used to describe terminating the insurance relationship at the end of the policy
period ?
a. cancellation
b. nonrenewal
c. separation
d. exclusion - CORRECT ANSWER -Nonrenewal
Which is the best example of an indirect loss ?
a. sequential loss
b. liability loss
c. employee theft
d. loss of use - CORRECT ANSWER -Loss of Use
Which is a two party contract?
,A. property
B. casualty
C. liability
D. auto - CORRECT ANSWER -Property
Insurance Contracts offset
a. speculative risk
b. pure risk
c. gambling
d. created risk - CORRECT ANSWER -Pure Risk
Which of the following is a third party contract ?
a. property
b. casualty
c. earthquake
d. theft - CORRECT ANSWER -Casualty
Risk is best defined as
a. chance of loss
b. certainty of loss
c. financially loss
d. sentimental loss - CORRECT ANSWER -Chance of loss
Being subject to a loss is
a. liability
, b. indemnity
c . exposure
d. subrogation - CORRECT ANSWER -Exposure
The ranking insured in a personal lines contract is the
a. named insured
b. first named insured
c. mortgagee
d. husband - CORRECT ANSWER -Named Insured
To be paid under a P&C contract, insurable interest must exist
a. at the time of the application
b. on the policy date
c. at the time of the loss
d. at the time of claim settlement - CORRECT ANSWER -At the time of the loss
This type of company benefits the policyowners
a. stock
b. mutual
c. foreign
d. alien - CORRECT ANSWER -Mutual
Ohio Casualty is doing regular business in Indiana. Within the State of Indiana, Ohio Casualty
would be considered ?
a. domestic company
b. nonadmitted company
Questions with Verified Correct Answers 2026
Update
If a company cancels an auto policy mid term, the refund will be made on
a. pro rata basis
b. short rate basis
c. retroactive basis
d. coinsurance basis - CORRECT ANSWER -Pro Rata Basis
What is the term used to describe terminating the insurance relationship at the end of the policy
period ?
a. cancellation
b. nonrenewal
c. separation
d. exclusion - CORRECT ANSWER -Nonrenewal
Which is the best example of an indirect loss ?
a. sequential loss
b. liability loss
c. employee theft
d. loss of use - CORRECT ANSWER -Loss of Use
Which is a two party contract?
,A. property
B. casualty
C. liability
D. auto - CORRECT ANSWER -Property
Insurance Contracts offset
a. speculative risk
b. pure risk
c. gambling
d. created risk - CORRECT ANSWER -Pure Risk
Which of the following is a third party contract ?
a. property
b. casualty
c. earthquake
d. theft - CORRECT ANSWER -Casualty
Risk is best defined as
a. chance of loss
b. certainty of loss
c. financially loss
d. sentimental loss - CORRECT ANSWER -Chance of loss
Being subject to a loss is
a. liability
, b. indemnity
c . exposure
d. subrogation - CORRECT ANSWER -Exposure
The ranking insured in a personal lines contract is the
a. named insured
b. first named insured
c. mortgagee
d. husband - CORRECT ANSWER -Named Insured
To be paid under a P&C contract, insurable interest must exist
a. at the time of the application
b. on the policy date
c. at the time of the loss
d. at the time of claim settlement - CORRECT ANSWER -At the time of the loss
This type of company benefits the policyowners
a. stock
b. mutual
c. foreign
d. alien - CORRECT ANSWER -Mutual
Ohio Casualty is doing regular business in Indiana. Within the State of Indiana, Ohio Casualty
would be considered ?
a. domestic company
b. nonadmitted company
