PERSONAL LINES LATEST EXAM QUESTIONS AND
SOLUTIONS GUARANTEE A+
✔✔Foreign - ✔✔If an insurer is incorporated in Rhode Island, but primarily does
business in New York, what type of insurer would it be considered in New York?
✔✔Admitted - ✔✔If Insurer ABC is authorized to do business in a particular state, it is
said to be:
✔✔Pure risk - ✔✔Insurance is designed to provide protection against which of the
following?
✔✔A stock insurance company is run by officers and directors and has a stated amount
of capital stock owned by stockholders - ✔✔Which of the following is true about a stock
insurance company?
✔✔Members are provided insurance by the company - ✔✔Which of the following is a
characteristic of a mutual insurance company?
✔✔Loss exposure - ✔✔Purely by existing, a person may be injured or property may be
damaged, even if the injury or damage does not occur. This condition is known as:
✔✔An agreement between the insurance company and the reinsurer - ✔✔Policyholder
A's insurer is providing coverage on too many homes subject to wind losses. As a
result, the company decides to reinsure those policies to share the high risk of wind
loss. The reinsurance contract can best be described as which of the following?
✔✔Personal Auto policies - ✔✔Which type of standard policy includes coverage options
that would not exclude damage by flood?
✔✔A vehicle newly acquired by the named insured that has not been reported to the
insurer - ✔✔The definition of an uninsured motor vehicle under a standard Personal
Auto policy does not include:
✔✔$70,000 - ✔✔N has a Personal Auto policy with 30/60/15 limits. After an accident
where N was at fault, $45,000 in damages is awarded against N for bodily injury to the
other driver and $10,000 in damages is awarded against N for property damage to the
other driver's car. N also incurred defense costs equal to $30,000. How much will N's
insurer pay?
✔✔Flood damage to a convertible when the top is left down - ✔✔Which of the following
losses could be covered under Part D of a Personal Auto policy?
, ✔✔Bodily injury or property damage to others - ✔✔Liability coverage provided by a
Personal Auto policy covers damages awarded against an insured for:
✔✔C's policy - ✔✔M and C both have Personal Auto policies with liability limits of
20/30/10. If M borrows C's car and injures a pedestrian, causing injuries that will cost
$5,000 to treat, which policy will provide coverage for the injured party?
✔✔The named insured's resident family member injures someone in an accident while
using a covered auto without the insured's permission - ✔✔A Personal Auto policy's
liability coverage would protect the insured in the event that:
✔✔Funeral service expenses incurred by an insured - ✔✔Part B of a Personal Auto
policy would pay for which of the following expenses?
✔✔Pay to the insured the remaining damages under underinsured motorists coverage -
✔✔After an auto accident, an at-fault driver, C, owes damages to Q for bodily injury. If
the amount of damages owed to Q exceeds C's liability limits, Q's Personal Auto policy
will
✔✔A car used to carpool with colleagues - ✔✔Part B - Medical Payments Coverage of
a Personal Auto policy would cover medical expenses sutained by any insured while
they occupy:
✔✔Mexico - ✔✔The policy territory of an unendorsed Personal Auto policy includes all
of the following, except:
✔✔$4,000 - ✔✔T has two Personal Auto policies applying to an auto. The policy
through Company A has a limit of $25,000 per accident for property damage liability.
The policy through Company B has a limit of $50,000 per accident for property damage
liability. How much will Company B have to pay for a covered loss of $6,000 after T
damages someone else's property?
✔✔The policy limit is applied on a per occurrence basis, not per person - ✔✔Under a
Personal Auto policy, all of the following are correct about medical payments coverage,
except:
✔✔Insolvency Protection Limitation - ✔✔If an insurer becomes insolvent within 1 year
after an accident for which it represents the party at fault, the injured party's uninsured
motorist coverage, if any, must cover any unpaid claims resulting from the accident.
✔✔A split-limit policy must provide at least - ✔✔$25,000 for bodily injury per person;
$50,000 for bodily injury to 2 or more persons per accident; $15,000 for property
damage per accident.
SOLUTIONS GUARANTEE A+
✔✔Foreign - ✔✔If an insurer is incorporated in Rhode Island, but primarily does
business in New York, what type of insurer would it be considered in New York?
✔✔Admitted - ✔✔If Insurer ABC is authorized to do business in a particular state, it is
said to be:
✔✔Pure risk - ✔✔Insurance is designed to provide protection against which of the
following?
✔✔A stock insurance company is run by officers and directors and has a stated amount
of capital stock owned by stockholders - ✔✔Which of the following is true about a stock
insurance company?
✔✔Members are provided insurance by the company - ✔✔Which of the following is a
characteristic of a mutual insurance company?
✔✔Loss exposure - ✔✔Purely by existing, a person may be injured or property may be
damaged, even if the injury or damage does not occur. This condition is known as:
✔✔An agreement between the insurance company and the reinsurer - ✔✔Policyholder
A's insurer is providing coverage on too many homes subject to wind losses. As a
result, the company decides to reinsure those policies to share the high risk of wind
loss. The reinsurance contract can best be described as which of the following?
✔✔Personal Auto policies - ✔✔Which type of standard policy includes coverage options
that would not exclude damage by flood?
✔✔A vehicle newly acquired by the named insured that has not been reported to the
insurer - ✔✔The definition of an uninsured motor vehicle under a standard Personal
Auto policy does not include:
✔✔$70,000 - ✔✔N has a Personal Auto policy with 30/60/15 limits. After an accident
where N was at fault, $45,000 in damages is awarded against N for bodily injury to the
other driver and $10,000 in damages is awarded against N for property damage to the
other driver's car. N also incurred defense costs equal to $30,000. How much will N's
insurer pay?
✔✔Flood damage to a convertible when the top is left down - ✔✔Which of the following
losses could be covered under Part D of a Personal Auto policy?
, ✔✔Bodily injury or property damage to others - ✔✔Liability coverage provided by a
Personal Auto policy covers damages awarded against an insured for:
✔✔C's policy - ✔✔M and C both have Personal Auto policies with liability limits of
20/30/10. If M borrows C's car and injures a pedestrian, causing injuries that will cost
$5,000 to treat, which policy will provide coverage for the injured party?
✔✔The named insured's resident family member injures someone in an accident while
using a covered auto without the insured's permission - ✔✔A Personal Auto policy's
liability coverage would protect the insured in the event that:
✔✔Funeral service expenses incurred by an insured - ✔✔Part B of a Personal Auto
policy would pay for which of the following expenses?
✔✔Pay to the insured the remaining damages under underinsured motorists coverage -
✔✔After an auto accident, an at-fault driver, C, owes damages to Q for bodily injury. If
the amount of damages owed to Q exceeds C's liability limits, Q's Personal Auto policy
will
✔✔A car used to carpool with colleagues - ✔✔Part B - Medical Payments Coverage of
a Personal Auto policy would cover medical expenses sutained by any insured while
they occupy:
✔✔Mexico - ✔✔The policy territory of an unendorsed Personal Auto policy includes all
of the following, except:
✔✔$4,000 - ✔✔T has two Personal Auto policies applying to an auto. The policy
through Company A has a limit of $25,000 per accident for property damage liability.
The policy through Company B has a limit of $50,000 per accident for property damage
liability. How much will Company B have to pay for a covered loss of $6,000 after T
damages someone else's property?
✔✔The policy limit is applied on a per occurrence basis, not per person - ✔✔Under a
Personal Auto policy, all of the following are correct about medical payments coverage,
except:
✔✔Insolvency Protection Limitation - ✔✔If an insurer becomes insolvent within 1 year
after an accident for which it represents the party at fault, the injured party's uninsured
motorist coverage, if any, must cover any unpaid claims resulting from the accident.
✔✔A split-limit policy must provide at least - ✔✔$25,000 for bodily injury per person;
$50,000 for bodily injury to 2 or more persons per accident; $15,000 for property
damage per accident.
