Fundamentals Of Insurance - Licensing Practice Exam 2 Questions with Correct Answers 2025

Fundamentals Of Insurance - Licensing
Practice Exam 2 Questions with Correct
Answers 2025
1.AToA"BindAaARisk"Ameans:



a.AHavingAauthorityAfromAtheAInsurerAtoAputAinsuranceAinAforce

b.AFindingAaAcompanyAwillingAtoAgiveAaAquoteAonAaArisk

c.AGettingAunderwritingAinformationAfromAaAclient

d.AAutomaticallyArenewingAanAexistingApolicyA-AcorrectAanswer-
a.AHavingAauthorityAfromAtheAInsurerAtoAputAinsuranceAinAforce



"Subrogation"dAmeans:



a.ATheArightAofAtheAinsuranceAcompanyAtoArecoverApaymentsAmadeAunderAtheApolicyAfromAanotherAperson
AwhoAisAlegallyAresponsibleAforAtheAloss



b.ATheAamountAofAtheAinsuranceAcompanyAreceivesAfromAaApersonAwhoAisAlegallyAresponsibleAforAaAloss

c.AThatAtheAinsuranceAcompanyAtakesAoverAtheAsalvageAafterAitAhasApaidAtheAclaimAinAfull

d.AThatAtheAInsuredAhasAtheAoptionAofAreceivingApaymentAforAtheAlossAfromAeitherAtheAinsurerAorAtheApers
onAresponsibleA-AcorrectAanswer-
a.ATheArightAofAtheAinsuranceAcompanyAtoArecoverApaymentsAmadeAunderAtheApolicyAfromAanotherAperson
AwhoAisAlegallyAresponsibleAforAtheAloss




InsuranceAcoverageAunderAtheAtermsAofAtheApolicyAofA"fire"AinsuranceAexpiresAat:



a.A12:01Aa.m.AStandardATimeAatAtheAlocationAofAtheApropertyAinsurance

b.A12:01Ap.m.AStandardATimeAatAtheAlocationAofAtheApropertyAinsured

c.ATwelveAmonthsAafterAtheAbrokerAbindsAcoverage

d.A12:01Aa.m.AStandardATimeAatAtheAaddressAofAtheAnamedAinsuredA-AcorrectAanswer-
d.A12:01Aa.m.AStandardATimeAatAtheAaddressAofAtheAnamedAinsured

,InAtheAcontractAofAInsurance,A"consideration"Ameans:



a.ASomethingAofAvalue

b.ATheAamountAofAtheAInsuredAcanAcollectAinAeventAofAaAclaim

c.ATheAobjectAofAinsurance

d.ATheAreviewingAofAtheAdetailsAofAtheAriskAtoAbeAinsuredAbyAanAunderwriterA-AcorrectAanswer-
a.ASomethingAofAvalue



AnAInsuranceAContractAindemnifiesAtheAInsuredAagainstAlossAarisingAoutAofAtheAhappeningAofAtheAspecificA
event.AWhichAofAtheAfollowingAisAcorrect?



a.ATheAeventAmustAbeAaAfutureAeventAandAitAmustAbeAaccidental

b.ATheAeventAmayAhappenAwithAtheAco-operationAofAtheAinsured

c.ATheAeventAmayAhappenAwithAtheAintentAofAtheAinsured

d.AAllAofAtheAaboveA-AcorrectAanswer-a.ATheAeventAmustAbeAaAfutureAeventAandAitAmustAbeAaccidental



"Indemnify"Ameans:



a.AReturningAtheApremiumAofAtheAInsured

b.ARestoringAtheAInsuredAtoAtheAsameAfinancialApositionAasAheAwasAinAimmediatelyApriorAtoAtheAloss

c.APayingAtheAInsuredAtheAfaceAamountAofAtheApolicy

d.ARestoringAtheAinsuredAtoAtheAsameAfinancialApositionAasAheAwasAinAatAtheAinceptionAdateAofAtheApolicyA-
AcorrectAanswer-

b.ARestoringAtheAInsuredAtoAtheAsameAfinancialApositionAasAheAwasAinAimmediatelyApriorAtoAtheAloss



UnderAtheAIndemnityAAgreementAofAtheAFireAPolicyAitAstatesAitAwillApayAtheAlesserAofAthreeAamountsAinAthe
AeventAofAaAclaim.AOneAfactorAwhichAdoesANOTAenterAintoAthisAcalculationAis:




a.ATheAactualAcashAvalueAofAtheAproperty

,b.ATheAoriginalAcostAofAtheAproperty

c.ATheAinsured'sAinterestAinAtheAproperty

d.ATheApolicyAlimitA-AcorrectAanswer-b.ATheAoriginalAcostAofAtheAproperty



AAphysicalAhazardAis:



a.AAAtypeAofAperil

b.ATheAsameAasAaAmoralAhazard

c.AAAphysicalAfeatureAofAaArisk,AwhichAmayAgiveAriseAtoAaAloss

d.ATheApossibilityAofAaAlossAdueAtoAtheAcharacterAofAtheAinsuredA-AcorrectAanswer-
c.AAAphysicalAfeatureAofAaArisk,AwhichAmayAgiveAriseAtoAaAloss



TheAfollowingAisAtheAmostApracticalAwayAinAwhichAtoAdealAwithArisk:



a.ATransferAofArisk

b.ARetentionAofArisk

c.AControllingAofARisk

d.AAvoidanceAofARiskA-AcorrectAanswer-a.ATransferAofArisk



IfAaApolicyAhasAbeenAcancelledAbyAtheAinsuranceACompanyAbeforeAtheAtermAhasAexpired:



a.ATheAcommissionAisAfullyAearned

b.ATheAtotalApremiumAisAreturnedA

c.APartAofAtheAcommission,AcorrespondingAtoAtheAunearnedAportionAofAtheApremiumAmustAbeAreturnedAtoA
theAInsured

d.ATheApolicyholderAwillAbeAchargedAanAadditionalAfeeAforAtheAcancellationA-AcorrectAanswer-



EveryApolicyAofA"fire"Ainsurance:

, a.AUsuallyAcoversAfire,AsmokeAandAspecifiedAtypesAofAexplosion

b.AIsArequiredAbyAlawAtoAcoverAfire,AwindstormAandAlightening

c.ACoversAfire,AexplosionAandAwindstorm

d.AIsArequiredAbyAlawAtoAcoverAatAleastAfire,AlighteningAandAspecifiedAtypesAofAexplosionsA-AcorrectAanswer-
d.AIsArequiredAbyAlawAtoAcoverAatAleastAfire,AlighteningAandAspecifiedAtypesAofAexplosions



InsurableAInterestAmeans:



a.AInterestAgainsAonAmoneyAinAtheAbank

b.AInterestApayableAonAloan

c.ATheApersonalAinterestAaApersonAhasAinAsomethingAheAexpectsAtoAinherit

d.ATheAfinancialAinterestAaApersonAhasAinAsomethingAofAvalueA-AcorrectAanswer-
d.ATheAfinancialAinterestAaApersonAhasAinAsomethingAofAvalue



TheAmajorAfunctionAofAinsuranceAis:



a.AToAreduceAtheAcostAofAlosses

b.AToAspreadAtheAlossesAofAtheAfewAamongAtheAmany

c.AToAsafeguardAmortgageAinvestments

d.AToAserveAasAtheAbasisAofAexistingAcreditAsystemA-AcorrectAanswer-
b.AToAspreadAtheAlossesAofAtheAfewAamongAtheAmany



WithArespectAtoAfederallyAlicensedAinsuranceAcompanies,AtheAFederalADepartmentAofAInsurance:



a.AControlsAtheAtypeAofApoliciesAissued

b.ARegulatesAtheAfinancialAstabilityAofAInsurers

c.AStipulatesAtheAtypesAofAagentsAwhoAmayArepresentAtheAcompany

d.AOnlyAsupervisesAlifeAinsuranceAcompaniesA-AcorrectAanswer-
b.ARegulatesAtheAfinancialAstabilityAofAInsurers