Personal Lines Insurance Exam NEWEST 2025 COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND
NEW VERSION!!
Incurred losses by its earned premiums - CORRECT ANSWER- An insurance company's loss ratio
is determined by dividing the insurer's:
Applicant - CORRECT ANSWER- In a standard insurance sales transaction involving an
applicant, a producer, and an insurance company, which party is the offeror?
Gramm-Leach-Bliley (GLB) Act - CORRECT ANSWER- Excalibur Insurance Company sends
periodic (annually) privacy notices to all customers to comply with which federal law?
incurred losses and earned premiums - CORRECT ANSWER- The two things that an insurance
company's loss ratio compares are:
a DP 1 policy (does not include "other coverage") - CORRECT ANSWER- Caleb wants a dwelling
policy that will protect the trees and shrubs on his property. He should therefore avoid buying:
only the insurer makes an enforceable promise - CORRECT ANSWER- Although the policyholder
must pay premiums to keep an insurance policy in force, the policy is considered a unilateral
policy because:
,adverse selection (the tendency of persons who are more likely to have a claim to buy and
maintain insurance) - CORRECT ANSWER- A homeowner who owns a vicious dog may be more
inclined to purchase liability insurance than one who doesn't. What is this an example of?
Conditional Contract - CORRECT ANSWER- While it provides considerable coverage, a property
and casualty insurance policy will not pay benefits unless specific actions defined in the policy
are taken by the policy holder when submitting a claim, due to the fact that the policy is a(n):
Liability coverage of section II - CORRECT ANSWER- The six ISO homeowners policy forms all
offer the same:
Permitted incidental occupancies endorsement - CORRECT ANSWER- is used for incidental
types of businesses that are conducted on the residence premises.
(e.g., Tiffany gives piano lessons to several young students who come to her home after
school.)
Robin's policy will pay all but $1000, Joe's policy will pay $900, and Joe will pay $100. -
CORRECT ANSWER- Joes personal auto policy (PAP) has a $100 deductible for collision
coverage on his sedan but no physical damage coverage on his old truck. When the truck is
being repaired, Joe borrows Robin's new sports car and crashes it. Robin's collision coverage
has a $1000 deductible. Who will pay for the sports car's repairs?
personal contract - CORRECT ANSWER- The typical property and casualty insurance policy
contains a provision expressly prohibiting the policyholder from assigning policy ownership to
another party w/o the insurer's written consent because the policy is a(n):
It has a 1% chance of being flooded in any given year. - CORRECT ANSWER- Ina's home is
located in a special flood hazard area (SFHA). What does this mean w/ respect to the area's
tendency to flood?
,The PAP's territory includes the United States, its territories or possessions, and Canada, but
not Mexico. - CORRECT ANSWER- Charlene's PAP provides coverage not only in her home state
but also when she is driving her car in all the following areas EXCEPT:
commercial tractor-trailer combination - CORRECT ANSWER- Which is least likely to be
considered a "covered auto" in a personal auto policy (PAP)?
false advertising - CORRECT ANSWER- In a radio advertisement for her insurance agency,
Jasmin knowingly makes statements that could deceive listeners about the products of a
competitor. What has Jasmine committed?
December 21 - CORRECT ANSWER- Acme Insurance intends to cancel Melanie's auto insurance
policy on Dec. 31 because she has not paid the annual premium. Acme must mail or deliver the
notice of cancellation to Melanie no later than...
Appoint the producer as its agent - CORRECT ANSWER- What must an insurance company do
to make a producer its agent?
-appointment of a person responsible for complying with state laws
-payment of requires fees
-activities remain within the scope of the business's purposes - CORRECT ANSWER- What are
the conditions for licensing a business entity as a producer in Iowa?
attractive nuisance
(a party can be held liable for maintaining something on its property that is attractive to curious
children even though the children are trespassers.) - CORRECT ANSWER- Bill's children have
grown up and moved away, but the tree house that he built for them now draws other
neighborhood children despite his handmade "No Trespassing" sign. If a neighbor's child is
, injured by falling from the tree house, Bill might be held liable for the child's injuries under
what legal doctrine or principle?
Bill answers "no" to a question asking if he has ever declares bankruptcy, knowing that 8 years
ago he filed for bankruptcy protection.
(Misrepresentation is a false statement of a material fact.) - CORRECT ANSWER- What is an
example of misrepresentation on an insurance application?
Coverage A
(covers structures attached to the dwelling) - CORRECT ANSWER- Leopoldo's two-car garage is
connected to his house by an enclosed breezeway. Which coverage of his homeowners
insurance policy applies to his garage?
$20,000 - CORRECT ANSWER- In Iowa, what is the minimum required limit in an auto insurance
policy for coverage of bodily injury?
a person applying to buy insurance on his retail business in a crime-ridden neighborhood -
CORRECT ANSWER- What is an example of adverse selection?
-Investigating suspected violations of the insurance code
-Enforcing Insurance laws
-Issuing regulations to administer the insurance code - CORRECT ANSWER- What powers are
granted to the Iowa Commissioner of Insurance?
subrogation
(stipulates the insurer's rights to recover damages from a third party when the insurer has
provided payment to the insured for a loss.) - CORRECT ANSWER- Owen's house is damaged
when Latrice's car crashes into it. After Owen's insurer pays to repair the house, the insurer
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND
NEW VERSION!!
Incurred losses by its earned premiums - CORRECT ANSWER- An insurance company's loss ratio
is determined by dividing the insurer's:
Applicant - CORRECT ANSWER- In a standard insurance sales transaction involving an
applicant, a producer, and an insurance company, which party is the offeror?
Gramm-Leach-Bliley (GLB) Act - CORRECT ANSWER- Excalibur Insurance Company sends
periodic (annually) privacy notices to all customers to comply with which federal law?
incurred losses and earned premiums - CORRECT ANSWER- The two things that an insurance
company's loss ratio compares are:
a DP 1 policy (does not include "other coverage") - CORRECT ANSWER- Caleb wants a dwelling
policy that will protect the trees and shrubs on his property. He should therefore avoid buying:
only the insurer makes an enforceable promise - CORRECT ANSWER- Although the policyholder
must pay premiums to keep an insurance policy in force, the policy is considered a unilateral
policy because:
,adverse selection (the tendency of persons who are more likely to have a claim to buy and
maintain insurance) - CORRECT ANSWER- A homeowner who owns a vicious dog may be more
inclined to purchase liability insurance than one who doesn't. What is this an example of?
Conditional Contract - CORRECT ANSWER- While it provides considerable coverage, a property
and casualty insurance policy will not pay benefits unless specific actions defined in the policy
are taken by the policy holder when submitting a claim, due to the fact that the policy is a(n):
Liability coverage of section II - CORRECT ANSWER- The six ISO homeowners policy forms all
offer the same:
Permitted incidental occupancies endorsement - CORRECT ANSWER- is used for incidental
types of businesses that are conducted on the residence premises.
(e.g., Tiffany gives piano lessons to several young students who come to her home after
school.)
Robin's policy will pay all but $1000, Joe's policy will pay $900, and Joe will pay $100. -
CORRECT ANSWER- Joes personal auto policy (PAP) has a $100 deductible for collision
coverage on his sedan but no physical damage coverage on his old truck. When the truck is
being repaired, Joe borrows Robin's new sports car and crashes it. Robin's collision coverage
has a $1000 deductible. Who will pay for the sports car's repairs?
personal contract - CORRECT ANSWER- The typical property and casualty insurance policy
contains a provision expressly prohibiting the policyholder from assigning policy ownership to
another party w/o the insurer's written consent because the policy is a(n):
It has a 1% chance of being flooded in any given year. - CORRECT ANSWER- Ina's home is
located in a special flood hazard area (SFHA). What does this mean w/ respect to the area's
tendency to flood?
,The PAP's territory includes the United States, its territories or possessions, and Canada, but
not Mexico. - CORRECT ANSWER- Charlene's PAP provides coverage not only in her home state
but also when she is driving her car in all the following areas EXCEPT:
commercial tractor-trailer combination - CORRECT ANSWER- Which is least likely to be
considered a "covered auto" in a personal auto policy (PAP)?
false advertising - CORRECT ANSWER- In a radio advertisement for her insurance agency,
Jasmin knowingly makes statements that could deceive listeners about the products of a
competitor. What has Jasmine committed?
December 21 - CORRECT ANSWER- Acme Insurance intends to cancel Melanie's auto insurance
policy on Dec. 31 because she has not paid the annual premium. Acme must mail or deliver the
notice of cancellation to Melanie no later than...
Appoint the producer as its agent - CORRECT ANSWER- What must an insurance company do
to make a producer its agent?
-appointment of a person responsible for complying with state laws
-payment of requires fees
-activities remain within the scope of the business's purposes - CORRECT ANSWER- What are
the conditions for licensing a business entity as a producer in Iowa?
attractive nuisance
(a party can be held liable for maintaining something on its property that is attractive to curious
children even though the children are trespassers.) - CORRECT ANSWER- Bill's children have
grown up and moved away, but the tree house that he built for them now draws other
neighborhood children despite his handmade "No Trespassing" sign. If a neighbor's child is
, injured by falling from the tree house, Bill might be held liable for the child's injuries under
what legal doctrine or principle?
Bill answers "no" to a question asking if he has ever declares bankruptcy, knowing that 8 years
ago he filed for bankruptcy protection.
(Misrepresentation is a false statement of a material fact.) - CORRECT ANSWER- What is an
example of misrepresentation on an insurance application?
Coverage A
(covers structures attached to the dwelling) - CORRECT ANSWER- Leopoldo's two-car garage is
connected to his house by an enclosed breezeway. Which coverage of his homeowners
insurance policy applies to his garage?
$20,000 - CORRECT ANSWER- In Iowa, what is the minimum required limit in an auto insurance
policy for coverage of bodily injury?
a person applying to buy insurance on his retail business in a crime-ridden neighborhood -
CORRECT ANSWER- What is an example of adverse selection?
-Investigating suspected violations of the insurance code
-Enforcing Insurance laws
-Issuing regulations to administer the insurance code - CORRECT ANSWER- What powers are
granted to the Iowa Commissioner of Insurance?
subrogation
(stipulates the insurer's rights to recover damages from a third party when the insurer has
provided payment to the insured for a loss.) - CORRECT ANSWER- Owen's house is damaged
when Latrice's car crashes into it. After Owen's insurer pays to repair the house, the insurer
