AL P&C University of Alabama Study Guide Questions and Answers Top Graded 2024

If a company cancels an auto policy mid-term, the refund will be made on a : A. pro rata basis B. short rate basis C. retroactive basis D. coinsurance basis - A. 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 - B. Nonrenewal Which is the best example of an indirect loss? A. Sequential loss B. Liability loss C. Employee theft D. Loss of use - D. Loss of use Which is a two party contract? A. Property B. Casualty C. Liability D. Auto - A. Property Insurance contracts offset A. speculative risk B. pure risk C. gambling D. created risk - B. Pure risk Which of the following is a third party contract? A. Property B. Casualty C. Earthquake D. Theft - B. Casualty Risk is best define as A. chance of loss B. certainty of loss C. financial loss D. sentimental loss - A. chance of loss Being subject to a loss is A. liability B. indemnity C. exposure D. subrogation - C. exposure The ranking insured in a Personal Lines contract is the A. named insured B. first named insured C. mortgagee D. husband - A. named insured To be paid a claim under a P & C contract, insurable interest must exist A. At the time of application B. on the policy date C. at the time of loss D. at the time of claim settlement - C. at the time of loss This type of company is run for the benefit of the policyowners: A. Stock B. Mutual C. Foreign D. Alien - B. Mutual Ohio Casualty is doing regular business in Indiana. Within the same state of Indiana, Ohio Casualty would be considered a(n) A. domestic company B. nonadmitted company C. alien company D. foreign Company - D. Foreign Ohio Casualty is doing regular business in Indiana. Within the state of Indiana, Ohio Casualty would be considered a(an) A. admitted company B. domestic company C. unauthorized company D. risk retention group - A. 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(n) A. domestic compnay B. foreign company C. alien company D. international company - B. foreign company With regard to insurance, the term consideration means A. the premium and the statements on the application B. the insurer's method of evaluating the applicant for coverage C. the screening process all agents undergo prior to licensing. D. the side-by-side policy comparison by the applicant - A. the premium and the statements on the application Which of the following terms indicates that an insurance contract contains the legal enforceable promises of only one party? A. Adhesion B. Unilateral C. Conditional D. Aleatory - B. Unilateral In purchasing an insurance contract, the applicant must accept the contract as written. This type of contract is referred to as a(n) A. settled contract B. aleatory contract C. contract of adhesion D. personal contract - C. Contract of adhesion Which of the following principles states that in forming an insurance contract, both parties have a responsibility to the order? A. Doctrine of Warranties B. Doctrine of Representations C. Doctrine of Utmost Good Faith D. Doctrine of Reasonable Expectations - C. Doctrine of Utmost Good Faith