Alabama P&C License Exam Study Set Questions &
Answers | Updated 2026
If a company cancels an auto policy mid-term, the refund will be made on a - CORRECT ANSWER
-pro rata basis
What is the term used to describe terminating the insurance relationship at the end of the policy
period - CORRECT ANSWER -nonrenewal
which is the best example of an indirect loss - CORRECT ANSWER -loss of use
which is a 2 party contract - CORRECT ANSWER -property
insurance contracts offset - CORRECT ANSWER -pure risk
which is a third party contract - CORRECT ANSWER -casualty
risk is best defined as - CORRECT ANSWER -chance of loss
being subject to a loss is - CORRECT ANSWER -exposure
the ranking insured in a personal lines contract is - CORRECT ANSWER -the named insured
To be paid a claim under a P&C contract, insurable interest must exist - CORRECT ANSWER -at
the time of loss
the type of company is run for the benefit of the policy owners: - CORRECT ANSWER -mutual
, Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty
would be considered a(n) - CORRECT ANSWER -foreign company
Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty
would be considered a(n) - CORRECT ANSWER -admitted company
a company chartered in guam or puerto rico doing regular business in new york would be
considered by new yorkers to be a - CORRECT ANSWER -foreign company
applicants consideration= - CORRECT ANSWER -premium + statements
Company's consideration= - CORRECT ANSWER -promise to pay
Insurable Interest - CORRECT ANSWER -insured must suffer a financial penalty if a loss occurs
application + premium - CORRECT ANSWER -the offer
unilateral - CORRECT ANSWER -one promiser, one sided
contract of adhesion - CORRECT ANSWER -one author, the applicant either or accepts or rejects
contract, the applicant is not offered the opportunity to negotiate terms or conditions
Aleatory Contract - CORRECT ANSWER -a contract where the values exchanged may not be
equal but depend on an uncertain event
representation - CORRECT ANSWER -must be true to the best of your knowledge
Answers | Updated 2026
If a company cancels an auto policy mid-term, the refund will be made on a - CORRECT ANSWER
-pro rata basis
What is the term used to describe terminating the insurance relationship at the end of the policy
period - CORRECT ANSWER -nonrenewal
which is the best example of an indirect loss - CORRECT ANSWER -loss of use
which is a 2 party contract - CORRECT ANSWER -property
insurance contracts offset - CORRECT ANSWER -pure risk
which is a third party contract - CORRECT ANSWER -casualty
risk is best defined as - CORRECT ANSWER -chance of loss
being subject to a loss is - CORRECT ANSWER -exposure
the ranking insured in a personal lines contract is - CORRECT ANSWER -the named insured
To be paid a claim under a P&C contract, insurable interest must exist - CORRECT ANSWER -at
the time of loss
the type of company is run for the benefit of the policy owners: - CORRECT ANSWER -mutual
, Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty
would be considered a(n) - CORRECT ANSWER -foreign company
Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty
would be considered a(n) - CORRECT ANSWER -admitted company
a company chartered in guam or puerto rico doing regular business in new york would be
considered by new yorkers to be a - CORRECT ANSWER -foreign company
applicants consideration= - CORRECT ANSWER -premium + statements
Company's consideration= - CORRECT ANSWER -promise to pay
Insurable Interest - CORRECT ANSWER -insured must suffer a financial penalty if a loss occurs
application + premium - CORRECT ANSWER -the offer
unilateral - CORRECT ANSWER -one promiser, one sided
contract of adhesion - CORRECT ANSWER -one author, the applicant either or accepts or rejects
contract, the applicant is not offered the opportunity to negotiate terms or conditions
Aleatory Contract - CORRECT ANSWER -a contract where the values exchanged may not be
equal but depend on an uncertain event
representation - CORRECT ANSWER -must be true to the best of your knowledge
