Alabama Property and Casualty Exam
Complete Questions and Guide Answers
100% Verified Graded A+
1. An incorporated insurance company which is run by a board of directors is known as
Answer a capital-stock company
2. Which of the following statements is true regarding a binder?
a. a binder guarantees that a policy will be issued by the insurance company.
b. a binder guarantees coverage and that a policy will be issued
c. a binder does not guarantee that a policy will be issued; it only guarantees
temporary coverage.
d. a binder does not afford any coverage, it is merely a snapshot of the coverage in effect
at the time it is issued.
Answer c
3. Liability imposed by law when someone is involved in an inherently danger- ous
activity or condition is known as
, Answer absolute liability
4. Which of the following elements of a contract does the premium represent?
a. offer and acceptance
b. competent parties
c. valid consideration
d. legal purpose
Answer c
5. Contracts written for a specified amount as agreed to by both the insured and insurer at
policy inception are known as
Answer valued or stated value contracts
6. All of the following must be present to establish negligence except
a. duty owed and breach of that duty
b. a proximate cause of loss
c. damages must exist
d. hazardous operations are involved
Answer d
7. The clause of an insurance contract that provides for equitable handling of loss
Complete Questions and Guide Answers
100% Verified Graded A+
1. An incorporated insurance company which is run by a board of directors is known as
Answer a capital-stock company
2. Which of the following statements is true regarding a binder?
a. a binder guarantees that a policy will be issued by the insurance company.
b. a binder guarantees coverage and that a policy will be issued
c. a binder does not guarantee that a policy will be issued; it only guarantees
temporary coverage.
d. a binder does not afford any coverage, it is merely a snapshot of the coverage in effect
at the time it is issued.
Answer c
3. Liability imposed by law when someone is involved in an inherently danger- ous
activity or condition is known as
, Answer absolute liability
4. Which of the following elements of a contract does the premium represent?
a. offer and acceptance
b. competent parties
c. valid consideration
d. legal purpose
Answer c
5. Contracts written for a specified amount as agreed to by both the insured and insurer at
policy inception are known as
Answer valued or stated value contracts
6. All of the following must be present to establish negligence except
a. duty owed and breach of that duty
b. a proximate cause of loss
c. damages must exist
d. hazardous operations are involved
Answer d
7. The clause of an insurance contract that provides for equitable handling of loss
