PERSONAL LINES PRACTICE TEST QUESTIONS
WITH CORRECT ANSWERS 2025/2026
Which word describes an insurance company incorporated outside of the state in which it is
doing business? - CORRECT ANSWER -Foreign
All of the following are examples of conduct of an agent that is regulated by Department of
Insurance EXCEPT - CORRECT ANSWER -misappropriation or conversion of funds by an insurance
agent
Which of the following standards is an agent violating by providing insurance to an insured at a
lower or higher premium than another insured in identical circumstances? - CORRECT ANSWER -
Unfair Discrimination
Which of the following makes use of market value in determining loss valuation? - CORRECT
ANSWER -Property is evaluated for what it sells for at the time of the loss.
the company cannot afford to insure its risks - CORRECT ANSWER -All of the following are
reasons a company would decide to self-insure EXCEPT
calls from or on behalf of political campaigns or organizations and charities - CORRECT ANSWER
-Which of the following is EXEMPT from the Telemarketing Sales Rule that established the
National Do Not Call Registry?
10 - CORRECT ANSWER -How many business days does a business have to honor a requested
email opt-out according to the 2003 CAN-SPAM Act?
The applicant is seeking a transaction greater than $150,000. - CORRECT ANSWER -The Fair
Credit Reporting Act permits consumer reporting agencies to include applicant information
about bankruptcies MORE than 10 years old under which of the following circumstances?
,subsidies, loss sharing or excess coverage - CORRECT ANSWER -The Terrorism Risk Insurance Act
and the National Flood Insurance Program are similar by providing which of the following?
financial institutions must have a privacy policy in place - CORRECT ANSWER -The Gramm-
Leach-Bliley Act was enacted to protect consumer's right to privacy and made mandatory which
of the following?
Avoidance - CORRECT ANSWER -What method of risk management is being utilized when a
person chooses not to drive because of the risk of having an automobile accident?
Coverage is triggered for smoke damage to siding caused by repeated acts by insured's
neighbor. - CORRECT ANSWER -Which is TRUE when the insured's limits of insurance apply per
occurrence?
less depreciation - CORRECT ANSWER -With what method are losses settled on an actual cash
value (ACV) basis?
Theft - CORRECT ANSWER -Which of the following property crimes also includes the unlawful
taking of property by stealth?
Nonpayment of premiums - CORRECT ANSWER -What is generally accepted as a condition for
which an insurer is allowed to cancel a policy?
Insurable interest in the property - CORRECT ANSWER -Which of the following gives a
mortgagee rights at the time of loss?
the benefit can exceed the policy limitations when the deductible is paid. - CORRECT ANSWER -
The following is true regarding deductibles EXCEPT
, premiums cost less for vacant or unoccupied property due to lower risk. - CORRECT ANSWER -
Which is FALSE regarding vacancy and unoccupancy
the loss is produced by an unnatural and broken series of events. - CORRECT ANSWER -Which is
FALSE regarding proximate cause
Morale Hazard - CORRECT ANSWER -Which type of hazard is an example of a person who
increases the chance of loss through carelessness or by irresponsible actions?
Negligence - CORRECT ANSWER -Absolute liability can be imposed by law and exist in the
absense of which of the following?
Cost of damages - CORRECT ANSWER -All of the following are used to establish negligence
EXCEPT
it is a written or verbal agreement confirming the policy. - CORRECT ANSWER -All of the
following is TRUE regarding a certificate of insurance EXCEPT
Promise - CORRECT ANSWER -Which is another term for offer and acceptance?
Arbitration includes other disagreements besides disputes of value. - CORRECT ANSWER -How
does the arbitration condition differ from the appraisal condition?
Someone who is incarcerated - CORRECT ANSWER -All of the following would be considered to
be incompetent to enter into a contract EXCEPT
a loss for which there is no protection under the policy terms - CORRECT ANSWER -Which type
of loss does an exclusion describe?
WITH CORRECT ANSWERS 2025/2026
Which word describes an insurance company incorporated outside of the state in which it is
doing business? - CORRECT ANSWER -Foreign
All of the following are examples of conduct of an agent that is regulated by Department of
Insurance EXCEPT - CORRECT ANSWER -misappropriation or conversion of funds by an insurance
agent
Which of the following standards is an agent violating by providing insurance to an insured at a
lower or higher premium than another insured in identical circumstances? - CORRECT ANSWER -
Unfair Discrimination
Which of the following makes use of market value in determining loss valuation? - CORRECT
ANSWER -Property is evaluated for what it sells for at the time of the loss.
the company cannot afford to insure its risks - CORRECT ANSWER -All of the following are
reasons a company would decide to self-insure EXCEPT
calls from or on behalf of political campaigns or organizations and charities - CORRECT ANSWER
-Which of the following is EXEMPT from the Telemarketing Sales Rule that established the
National Do Not Call Registry?
10 - CORRECT ANSWER -How many business days does a business have to honor a requested
email opt-out according to the 2003 CAN-SPAM Act?
The applicant is seeking a transaction greater than $150,000. - CORRECT ANSWER -The Fair
Credit Reporting Act permits consumer reporting agencies to include applicant information
about bankruptcies MORE than 10 years old under which of the following circumstances?
,subsidies, loss sharing or excess coverage - CORRECT ANSWER -The Terrorism Risk Insurance Act
and the National Flood Insurance Program are similar by providing which of the following?
financial institutions must have a privacy policy in place - CORRECT ANSWER -The Gramm-
Leach-Bliley Act was enacted to protect consumer's right to privacy and made mandatory which
of the following?
Avoidance - CORRECT ANSWER -What method of risk management is being utilized when a
person chooses not to drive because of the risk of having an automobile accident?
Coverage is triggered for smoke damage to siding caused by repeated acts by insured's
neighbor. - CORRECT ANSWER -Which is TRUE when the insured's limits of insurance apply per
occurrence?
less depreciation - CORRECT ANSWER -With what method are losses settled on an actual cash
value (ACV) basis?
Theft - CORRECT ANSWER -Which of the following property crimes also includes the unlawful
taking of property by stealth?
Nonpayment of premiums - CORRECT ANSWER -What is generally accepted as a condition for
which an insurer is allowed to cancel a policy?
Insurable interest in the property - CORRECT ANSWER -Which of the following gives a
mortgagee rights at the time of loss?
the benefit can exceed the policy limitations when the deductible is paid. - CORRECT ANSWER -
The following is true regarding deductibles EXCEPT
, premiums cost less for vacant or unoccupied property due to lower risk. - CORRECT ANSWER -
Which is FALSE regarding vacancy and unoccupancy
the loss is produced by an unnatural and broken series of events. - CORRECT ANSWER -Which is
FALSE regarding proximate cause
Morale Hazard - CORRECT ANSWER -Which type of hazard is an example of a person who
increases the chance of loss through carelessness or by irresponsible actions?
Negligence - CORRECT ANSWER -Absolute liability can be imposed by law and exist in the
absense of which of the following?
Cost of damages - CORRECT ANSWER -All of the following are used to establish negligence
EXCEPT
it is a written or verbal agreement confirming the policy. - CORRECT ANSWER -All of the
following is TRUE regarding a certificate of insurance EXCEPT
Promise - CORRECT ANSWER -Which is another term for offer and acceptance?
Arbitration includes other disagreements besides disputes of value. - CORRECT ANSWER -How
does the arbitration condition differ from the appraisal condition?
Someone who is incarcerated - CORRECT ANSWER -All of the following would be considered to
be incompetent to enter into a contract EXCEPT
a loss for which there is no protection under the policy terms - CORRECT ANSWER -Which type
of loss does an exclusion describe?
