ALABAMA PROPERTY AND CASUALTY STUDY
PAPER ELITE GUIDE WITH SOLVED SCENARIOS
AND DETAILED ANSWERS 2026
◉Adverse selection is a concept best described as . Answer: Risks with
higher probability of loss seeking insurance more often than other risks
◉According to the loss payment condition in HO policies, losses must
be paid within how many days of the insurer receiving proof of loss .
Answer: 60 days
◉which is defined in the personal auto policy as an uninsured motor
vehicle . Answer: a vehicle which is not covered by a bodily injury
liability policy, or it is covered by a BILP but the coverage is less than
state minimum, a vehicle in which the driver or the owner is unknown
◉Why don't commercial auto coverage forms automatically include
medical payment coverage? . Answer: Often, any person occupying a
commercial vehicle would be covered under a workers compensation
policy
◉not an insurer but an organization formed to provide insurance
benefits for members of an affiliated lodge or religious organization .
Answer: Fraternal Benefit Society
,◉an example of a producer's fiduciary duty is . Answer: the trust that a
client places in the producer in regard to handling premiums
◉The commercial property declarations page contains which of the
following information . Answer: Description of the property insured
◉What is the earliest legal age that a person can be licensed as an
insurance producer . Answer: 18
◉Coverage A - Bodily Injury and Property Damage in the commercial
general liability policy will cover . Answer: Losses due to the insured's
negligence
◉Paul is a producer in Louisiana and wants to become a producer in
Alabama. The Commissioner will waive certain exam requirements,
provided that Louisiana would waive these same requirements if an
Alabama producer sought licensure in Louisiana. What term is used to
describe this phenomenon? . Answer: Reciprocity
◉Which inland marine coverage condition says that an insurer will
settle with the actual owners of a property involved in a loss? . Answer:
Privilege to adjust with the owner
, ◉The garage coverage form is used to insure . Answer: auto businesses
such as auto dealers, service stations, and auto repair shops
◉Which would be excluded under med payments coverage of a personal
auto policy . Answer: The insured is injured while driving his
motorcycle on his resident premises (medical payments only covers
accidents with 4 wheels)
◉Whenever the commissioner receives a demand for a hearing, a
hearing shall be scheduled to be held within . Answer: 30 days
◉An endorsement added to a businessowners policy that provides
coverage for direct damage caused by utility service disruption
stemming from a covered peril is called . Answer: Utility Services -
Direct Damage
◉An insured owns and operates a commercial business. He has included
a business income coverage form with his commercial package policy .
When the insured's business is severely damaged by fire, the business
income coverage will pay for . Answer: Net income plus continuing
expenses of the business
◉What is the purpose if increased value and excess liability (IVEL)
clauses . Answer: to provide extra coverage for the same losses covered
by an underlining policy
PAPER ELITE GUIDE WITH SOLVED SCENARIOS
AND DETAILED ANSWERS 2026
◉Adverse selection is a concept best described as . Answer: Risks with
higher probability of loss seeking insurance more often than other risks
◉According to the loss payment condition in HO policies, losses must
be paid within how many days of the insurer receiving proof of loss .
Answer: 60 days
◉which is defined in the personal auto policy as an uninsured motor
vehicle . Answer: a vehicle which is not covered by a bodily injury
liability policy, or it is covered by a BILP but the coverage is less than
state minimum, a vehicle in which the driver or the owner is unknown
◉Why don't commercial auto coverage forms automatically include
medical payment coverage? . Answer: Often, any person occupying a
commercial vehicle would be covered under a workers compensation
policy
◉not an insurer but an organization formed to provide insurance
benefits for members of an affiliated lodge or religious organization .
Answer: Fraternal Benefit Society
,◉an example of a producer's fiduciary duty is . Answer: the trust that a
client places in the producer in regard to handling premiums
◉The commercial property declarations page contains which of the
following information . Answer: Description of the property insured
◉What is the earliest legal age that a person can be licensed as an
insurance producer . Answer: 18
◉Coverage A - Bodily Injury and Property Damage in the commercial
general liability policy will cover . Answer: Losses due to the insured's
negligence
◉Paul is a producer in Louisiana and wants to become a producer in
Alabama. The Commissioner will waive certain exam requirements,
provided that Louisiana would waive these same requirements if an
Alabama producer sought licensure in Louisiana. What term is used to
describe this phenomenon? . Answer: Reciprocity
◉Which inland marine coverage condition says that an insurer will
settle with the actual owners of a property involved in a loss? . Answer:
Privilege to adjust with the owner
, ◉The garage coverage form is used to insure . Answer: auto businesses
such as auto dealers, service stations, and auto repair shops
◉Which would be excluded under med payments coverage of a personal
auto policy . Answer: The insured is injured while driving his
motorcycle on his resident premises (medical payments only covers
accidents with 4 wheels)
◉Whenever the commissioner receives a demand for a hearing, a
hearing shall be scheduled to be held within . Answer: 30 days
◉An endorsement added to a businessowners policy that provides
coverage for direct damage caused by utility service disruption
stemming from a covered peril is called . Answer: Utility Services -
Direct Damage
◉An insured owns and operates a commercial business. He has included
a business income coverage form with his commercial package policy .
When the insured's business is severely damaged by fire, the business
income coverage will pay for . Answer: Net income plus continuing
expenses of the business
◉What is the purpose if increased value and excess liability (IVEL)
clauses . Answer: to provide extra coverage for the same losses covered
by an underlining policy
