State Licensing Exam 20-44 Personal
Lines Agent 2025/2026 Exam Questions
and Verified Answers | Already Graded
A+
Risk - 🧠ANSWER ✔✔The chance of financial loss
Pure risk - 🧠ANSWER ✔✔ONLY the chance of loss
Speculative risk - 🧠ANSWER ✔✔Chance of loss or gain
Insurance - 🧠ANSWER ✔✔Contract whereby one undertakes to indemnify
another or pay or allow a specified amount or benefit upon a contingency;
Used to offset the financial impact of pure risk
Law of large numbers - 🧠ANSWER ✔✔Statistical concept that the more
exposure units, the more likely projections are to equal what actually
occurs (Ex: More drivers on the road means more accidents)
,Policy - 🧠ANSWER ✔✔Written contract/agreement for or effecting
insurance (Includes all clauses, riders, endorsements, and papers)
Endorsement - 🧠ANSWER ✔✔A modification to the original policy (changes
that are made)
Contract - 🧠ANSWER ✔✔Legally enforceable obligations made by one or
more people (Can be oral or written)
Offer - 🧠ANSWER ✔✔Made by one or more parties
Communication - 🧠ANSWER ✔✔__________ of acceptance in the
prescribed manner and time frame
Mutuality of obligation - 🧠ANSWER ✔✔Obligation to act from all parties
Capacity - 🧠ANSWER ✔✔Legal standing to engage in the agreement
Acceptance - 🧠ANSWER ✔✔___________ of the offer takes place before
consideration
Consideration - 🧠ANSWER ✔✔Value exchanges between the parties
Competency - 🧠ANSWER ✔✔Must have good mental health to engage in
agreement; Ex can't have dementia
,Legality - 🧠ANSWER ✔✔Must have legal intent to engage in agreement
Mutual assent - 🧠ANSWER ✔✔Two parties agreed and are prepared to
enter a contract
Statute - 🧠ANSWER ✔✔Written law passed by legislature on the state of
federal level
Invalid - 🧠ANSWER ✔✔Insurance provisions which conflict statutory
provisions are ___________
Binders - 🧠ANSWER ✔✔Coverage effective "bound" prior to issuance of
policy (Can be effective immediately and can be written or oral), 60 days
does not require notice of cancellation
Property insurance - 🧠ANSWER ✔✔Insurer pays directly to insured or
specifically named interests for property damages
Liability insurance - 🧠ANSWER ✔✔Payment made on behalf of insured to
another for bodily injuries or property damage
Insurance policies - 🧠ANSWER ✔✔_________ can have both property and
liability insurance
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, Contract characteristics - 🧠ANSWER ✔✔Personal contract, conditional
contract, indemnity contract, contract of adhesions
Personal contract - 🧠ANSWER ✔✔Property and liability insurance policies
that cover losses sustained by persons
Conditional contract - 🧠ANSWER ✔✔The insured has to satisfy certain
conditions for the insurer to pay any claim
Contracts of adhesions - 🧠ANSWER ✔✔Take it or leave it basis, Favor the
insured because the insurance company drafted the contract and had the
ability to write exactly what they wanted and intended CLEARLY!!
Indemnity contract - 🧠ANSWER ✔✔The insured is restored to the approx.
financial condition occupied before the loss (Ensures the insured is no
better or worse than before the loss-Actual cash value)
Indemnity exceptions - 🧠ANSWER ✔✔Replacement cost endorsements
"new" for "old", agreed value, direct payment to claimant in a liability claim
Agreed value - 🧠ANSWER ✔✔Value agreed to at the time the insurance is
taken out
Lines Agent 2025/2026 Exam Questions
and Verified Answers | Already Graded
A+
Risk - 🧠ANSWER ✔✔The chance of financial loss
Pure risk - 🧠ANSWER ✔✔ONLY the chance of loss
Speculative risk - 🧠ANSWER ✔✔Chance of loss or gain
Insurance - 🧠ANSWER ✔✔Contract whereby one undertakes to indemnify
another or pay or allow a specified amount or benefit upon a contingency;
Used to offset the financial impact of pure risk
Law of large numbers - 🧠ANSWER ✔✔Statistical concept that the more
exposure units, the more likely projections are to equal what actually
occurs (Ex: More drivers on the road means more accidents)
,Policy - 🧠ANSWER ✔✔Written contract/agreement for or effecting
insurance (Includes all clauses, riders, endorsements, and papers)
Endorsement - 🧠ANSWER ✔✔A modification to the original policy (changes
that are made)
Contract - 🧠ANSWER ✔✔Legally enforceable obligations made by one or
more people (Can be oral or written)
Offer - 🧠ANSWER ✔✔Made by one or more parties
Communication - 🧠ANSWER ✔✔__________ of acceptance in the
prescribed manner and time frame
Mutuality of obligation - 🧠ANSWER ✔✔Obligation to act from all parties
Capacity - 🧠ANSWER ✔✔Legal standing to engage in the agreement
Acceptance - 🧠ANSWER ✔✔___________ of the offer takes place before
consideration
Consideration - 🧠ANSWER ✔✔Value exchanges between the parties
Competency - 🧠ANSWER ✔✔Must have good mental health to engage in
agreement; Ex can't have dementia
,Legality - 🧠ANSWER ✔✔Must have legal intent to engage in agreement
Mutual assent - 🧠ANSWER ✔✔Two parties agreed and are prepared to
enter a contract
Statute - 🧠ANSWER ✔✔Written law passed by legislature on the state of
federal level
Invalid - 🧠ANSWER ✔✔Insurance provisions which conflict statutory
provisions are ___________
Binders - 🧠ANSWER ✔✔Coverage effective "bound" prior to issuance of
policy (Can be effective immediately and can be written or oral), 60 days
does not require notice of cancellation
Property insurance - 🧠ANSWER ✔✔Insurer pays directly to insured or
specifically named interests for property damages
Liability insurance - 🧠ANSWER ✔✔Payment made on behalf of insured to
another for bodily injuries or property damage
Insurance policies - 🧠ANSWER ✔✔_________ can have both property and
liability insurance
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, Contract characteristics - 🧠ANSWER ✔✔Personal contract, conditional
contract, indemnity contract, contract of adhesions
Personal contract - 🧠ANSWER ✔✔Property and liability insurance policies
that cover losses sustained by persons
Conditional contract - 🧠ANSWER ✔✔The insured has to satisfy certain
conditions for the insurer to pay any claim
Contracts of adhesions - 🧠ANSWER ✔✔Take it or leave it basis, Favor the
insured because the insurance company drafted the contract and had the
ability to write exactly what they wanted and intended CLEARLY!!
Indemnity contract - 🧠ANSWER ✔✔The insured is restored to the approx.
financial condition occupied before the loss (Ensures the insured is no
better or worse than before the loss-Actual cash value)
Indemnity exceptions - 🧠ANSWER ✔✔Replacement cost endorsements
"new" for "old", agreed value, direct payment to claimant in a liability claim
Agreed value - 🧠ANSWER ✔✔Value agreed to at the time the insurance is
taken out
