Alabama Property and Casualty Exam Questions &
Answers | Updated 2026
What is a hazard? - CORRECT ANSWER -an increase in the possibility that a loss might occur
transfer risk from a person or business to an insurance company that agrees to to pay for losses
in exchange for a premium. - CORRECT ANSWER -insurance
The type of insurance company in which the policyholder is considered an owner, with the right
to vote and share in the profits is a - CORRECT ANSWER -mutual company
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the final
mortgage payment to FBN Mortgage Company. Jewel is considering selling her home to her
niece, Cynthia. Who has an insurable interest in the home? - CORRECT ANSWER -Jewel Canford
Risk of loss is a speculative risk - CORRECT ANSWER -Which one of the following is NOT an
element of insurability?
a. Loss must be calculable
b. Risk of loss must represent a financial harship
c. Cost of insurance must be affordable
d. 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... - CORRECT ANSWER -indemnity
Declarations - CORRECT ANSWER -What part of an insurance policy personalizes the policy as to
who and what are insured?
An insurance policy is prepared by the insurance company, with little or no input from the
insured. This means that an insurance policy is a/an... - CORRECT ANSWER -adhesion contract
, An individual who owns and lives in a condominium can obtain broad coverage for personal
property in the condo under which Homeowners form? - CORRECT ANSWER -HO-6
What is the purpose of the Fair Credit Reporting Act? - CORRECT ANSWER -to give the consumer
recourse if insurance is denied on the basis of a credit report.
a fire that was caused by the insureds negligence burns a neighbors building, the owner of the
building sues the insured. - CORRECT ANSWER -Which of the following is a liability loss?
What rating method involves modifying the premium based on the insured's loss experience
over a specified period of time? - CORRECT ANSWER -Experience rating
Most Flood insurance coverage is provided by - CORRECT ANSWER -a federal government
program
Which of the following businesses could be eligible for a Business owners policy?
a. Hometown Bank & Trust
b. Rest Easy Motel
c. Family Fun Time Amusement Park
d. Joe's Bar and Grill - CORRECT ANSWER -Rest Easy Motel
Pain and Suffering - CORRECT ANSWER -Which one of the following types of benefits is generally
not provided by a state's workers compensation law?
foreign - CORRECT ANSWER -Which of the following describes an insurance company doing
business in a state other than the one where it is incorporated?
Answers | Updated 2026
What is a hazard? - CORRECT ANSWER -an increase in the possibility that a loss might occur
transfer risk from a person or business to an insurance company that agrees to to pay for losses
in exchange for a premium. - CORRECT ANSWER -insurance
The type of insurance company in which the policyholder is considered an owner, with the right
to vote and share in the profits is a - CORRECT ANSWER -mutual company
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the final
mortgage payment to FBN Mortgage Company. Jewel is considering selling her home to her
niece, Cynthia. Who has an insurable interest in the home? - CORRECT ANSWER -Jewel Canford
Risk of loss is a speculative risk - CORRECT ANSWER -Which one of the following is NOT an
element of insurability?
a. Loss must be calculable
b. Risk of loss must represent a financial harship
c. Cost of insurance must be affordable
d. 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... - CORRECT ANSWER -indemnity
Declarations - CORRECT ANSWER -What part of an insurance policy personalizes the policy as to
who and what are insured?
An insurance policy is prepared by the insurance company, with little or no input from the
insured. This means that an insurance policy is a/an... - CORRECT ANSWER -adhesion contract
, An individual who owns and lives in a condominium can obtain broad coverage for personal
property in the condo under which Homeowners form? - CORRECT ANSWER -HO-6
What is the purpose of the Fair Credit Reporting Act? - CORRECT ANSWER -to give the consumer
recourse if insurance is denied on the basis of a credit report.
a fire that was caused by the insureds negligence burns a neighbors building, the owner of the
building sues the insured. - CORRECT ANSWER -Which of the following is a liability loss?
What rating method involves modifying the premium based on the insured's loss experience
over a specified period of time? - CORRECT ANSWER -Experience rating
Most Flood insurance coverage is provided by - CORRECT ANSWER -a federal government
program
Which of the following businesses could be eligible for a Business owners policy?
a. Hometown Bank & Trust
b. Rest Easy Motel
c. Family Fun Time Amusement Park
d. Joe's Bar and Grill - CORRECT ANSWER -Rest Easy Motel
Pain and Suffering - CORRECT ANSWER -Which one of the following types of benefits is generally
not provided by a state's workers compensation law?
foreign - CORRECT ANSWER -Which of the following describes an insurance company doing
business in a state other than the one where it is incorporated?
