AL P&C UNIVERSITY OF ALABAMA STUDY
GUIDE QUESTIONS WITH 100% ACCURATE
ANSWERS
ALABAMA AL P&C
STUDYGLOBAL 5/16/25 ALABAMA AL P&C
,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 - Accurate answers 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 - Accurate answers B. Nonrenewal
Which is the best example of an indirect loss?
A. Sequential loss
B. Liability loss
C. Employee theft
D. Loss of use - Accurate answers D. Loss of use
Which is a two party contract?
A. Property
B. Casualty
C. Liability
D. Auto - Accurate answers A. Property
Insurance contracts offset
A. speculative risk
B. pure risk
C. gambling
D. created risk - Accurate answers B. Pure risk
Which of the following is a third party contract?
A. Property
B. Casualty
C. Earthquake
D. Theft - Accurate answers B. Casualty
Risk is best define as
A. chance of loss
,B. certainty of loss
C. financial loss
D. sentimental loss - Accurate answers A. chance of loss
Being subject to a loss is
A. liability
B. indemnity
C. exposure
D. subrogation - Accurate answers C. exposure
The ranking insured in a Personal Lines contract is the
A. named insured
B. first named insured
C. mortgagee
D. husband - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers C. Doctrine of Utmost Good Faith
An incorrect statement made intentionally on a Personal Auto insurance application is a
A. Fraud
B. Warranty
C. Misrepresentation
D. Conceament - Accurate answers C. Misrepresentation
A binder is a(n)
GUIDE QUESTIONS WITH 100% ACCURATE
ANSWERS
ALABAMA AL P&C
STUDYGLOBAL 5/16/25 ALABAMA AL P&C
,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 - Accurate answers 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 - Accurate answers B. Nonrenewal
Which is the best example of an indirect loss?
A. Sequential loss
B. Liability loss
C. Employee theft
D. Loss of use - Accurate answers D. Loss of use
Which is a two party contract?
A. Property
B. Casualty
C. Liability
D. Auto - Accurate answers A. Property
Insurance contracts offset
A. speculative risk
B. pure risk
C. gambling
D. created risk - Accurate answers B. Pure risk
Which of the following is a third party contract?
A. Property
B. Casualty
C. Earthquake
D. Theft - Accurate answers B. Casualty
Risk is best define as
A. chance of loss
,B. certainty of loss
C. financial loss
D. sentimental loss - Accurate answers A. chance of loss
Being subject to a loss is
A. liability
B. indemnity
C. exposure
D. subrogation - Accurate answers C. exposure
The ranking insured in a Personal Lines contract is the
A. named insured
B. first named insured
C. mortgagee
D. husband - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers 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 - Accurate answers C. Doctrine of Utmost Good Faith
An incorrect statement made intentionally on a Personal Auto insurance application is a
A. Fraud
B. Warranty
C. Misrepresentation
D. Conceament - Accurate answers C. Misrepresentation
A binder is a(n)
