Personal Lines Insurance Questions And Correct Verified Answers

PERSONAL LINES INSURANCE QUESTIONS
AND CORRECT VERIFIED ANSWERS
RiskA2_________A2isA2whenA2oneA2takesA2actionA2toA2preventA2orA2reduceA2potentialA2los
s.A2-A2Ans--Reduction

WhenA2theA2numberA2ofA2similarA2unitsA2increases,A2theA2predictabilityA2ofA2theA2lossA2imp
rovesA2accordingA2toA2theA2ruleA2ofA2_____A2________.A2-A2Ans--LargeA2Numbers

TheA2insuringA2ofA2risksA2thatA2areA2moreA2proneA2toA2lossesA2thanA2averageA2risksA2isA2k
nownA2as?A2-A2Ans--AdverseA2Selection

AA2___________A2contractA2isA2anA2arrangementA2whereA2oneA2insurerA2transfersA2orA2sh
aresA2risksA2withA2anotherA2insurer.A2-A2Ans--Reinsurance

_____________A2ReinsuranceA2isA2acceptedA2orA2rejectedA2byA2aA2caseA2byA2caseA2basi
s.A2-A2Ans--Facultative

TheA2factA2thatA2anA2insuredA2wouldA2profitA2fromA2aA2loss,A2wouldA2beA2aA2violationA2ofA2t
heA2principleA2ofA2___________.A2-A2Ans--Indemnity

TheA2determinationA2ofA2acceptableA2risksA2isA2theA2primaryA2functionA2ofA2theA2________
___A2.A2-A2Ans--Underwriter

UnderwritersA2likeA2toA2selectA2insuredsA2who'sA2actualA2lossesA2willA2beA2similarA2toA2exp
ectedA2losses.A2TrueA2orA2False?A2-A2Ans--True

WhenA2ratesA2cannotA2beA2usedA2untilA2theyA2areA2improvedA2byA2theA2departmentA2orA2di
visionA2ofA2insurance,A2theyA2areA2calledA2____A2________A2rates.A2-A2Ans--
PriorA2Approval

TheA2terminationA2ofA2aA2policyA2byA2eitherA2theA2insuredA2orA2insurerA2beforeA2itsA2expirat
ionA2dateA2isA2knownA2asA2___________.A2-A2Ans--Cancellation

WhenA2theA2insurerA2cancelsA2aA2propertyA2policy,A2theA2unearnedA2premiumA2isA2returne
dA2___A2____.A2-A2Ans--ProA2Rata

WhenA2anA2insuredA2requestsA2cancellationA2ofA2aA2policy,A2theA2unearnedA2premiumA2isA
2refundedA2toA2theA2insuredA2onA2aA2_____A2_____.A2-A2Ans--ShortA2Rate


AA2fireA2isA2consideredA2toA2beA2aA2_____A2ofA2aA2potentialA2loss.A2-A2Ans--Cause

AA2documentA2thatA2providesA2temporaryA2insuranceA2coverageA2untilA2aA2policyA2isA2issu
edA2isA2knownA2asA2aA2______.A2-A2Ans--Binder

,TheA2processA2byA2whichA2aA2disputedA2claimA2isA2decidedA2byA2aA2neutralA2thirdA2partyA2i
sA2knownA2asA2___________.A2-A2Ans--Arbitration

_________A2_________A2isA2aA2situationA2whereA2thereA2areA2twoA2causesA2resultingA2inA
2aA2loss,A2withA2oneA2ofA2theA2causesA2excludedA2andA2theA2otherA2causeA2ofA2lossA2notA2
excluded.A2-A2Ans--ConcurrentA2Causation

IfA2twoA2orA2moreA2policiesA2provideA2identicalA2coverageA2forA2theA2sameA2risk,A2theA2poli
ciesA2areA2deemedA2toA2beA2__________.A2-A2Ans--Concurrent

PolicyA2AA2isA2writtenA2forA2$100,000,A2andA2anA2excessA2PolicyA2BA2isA2writtenA2forA2$200
,000A2onA2theA2sameA2property.A2InA2theA2eventA2ofA2aA2$20,000A2loss,A2howA2muchA2willA2
eachA2policyA2pay?A2-A2Ans--A=A2$20,000A2;A2B=A2$0

AA2buildingA2thatA2hasA2neitherA2occupantsA2norA2personalA2propertyA2isA2______.A2-
A2Ans--Vacant


WhenA2propertyA2isA2damagedA2byA2fire,A2theA2lossA2isA2saidA2toA2beA2a(n)A2______A2loss.
A2-A2Ans--Direct


IfA2aA2fireA2onA2aA2premisesA2causedA2aA2powerA2outage,A2whichA2causedA2meatA2inA2theA2
freezerA2toA2spoil,A2wouldA2theA2meatA2spoilageA2beA2consideredA2aA2directA2lossA2orA2indi
rectA2loss?A2-A2Ans--IndirectA2Loss

OpenA2perilA2policiesA2includeA2lossesA2causedA2byA2theft.A2TrueA2orA2False?A2-A2Ans--
True

IfA2aA2propertyA2ownerA2doesA2notA2desireA2anyA2deductionA2forA2depreciationA2followingA2
aA2coveredA2loss,A2he/sheA2shouldA2purchaseA2aA2___________A2____A2policy.A2-A2Ans--
ReplacementA2Cost

ForA2replacementA2costA2coverageA2toA2applyA2inA2dwellingA2policies,A2theA2insuredA2must
A2carryA2insuranceA2atA2leastA2equalA2toA2____
%A2ofA2theA2costA2ofA2replacementA2ofA2theA2building.A2-A2Ans--80

WouldA2aA2statedA2amountA2methodA2ofA2valuationA2likelyA2beA2usedA2whenA2insuringA2gol
dA2bullion?A2-A2Ans--No

AnA2____A2policyA2isA2oneA2thatA2theA2valueA2ofA2theA2subjectA2matterA2isA2notA2agreedA2u
pon,A2butA2isA2leftA2toA2beA2ascertainedA2inA2caseA2ofA2loss.A2-A2Ans--Open

AA2valuedA2policyA2isA2oneA2thatA2expressesA2onA2it'sA2faceA2anA2agreementA2thatA2theA2thi
ngA2insuredA2isA2valuedA2atA2aA2specificA2sum.A2TrueA2orA2False?A2-A2Ans--True

, InsuringA2moreA2thanA2oneA2propertyA2onA2oneA2policyA2forA2aA2singleA2amountA2ofA2insura
nceA2thatA2appliesA2toA2allA2propertiesA2coveredA2underA2theA2policyA2isA2knownA2asA2____
___A2coverage.A2-A2Ans--Blanket

TheA2nameA2ofA2theA2insuredA2isA2foundA2onA2theA2declarationsA2pageA2ofA2theA2policy.A2T
rueA2orA2False?A2-A2Ans--True

WhatA2partA2orA2portionA2ofA2aA2propertyA2policyA2containsA2theA2effectiveA2orA2expirationA2
datesA2ofA2theA2policy?A2-A2Ans--Declarations

AreA2theA2insurer'sA2limitsA2ofA2insuranceA2amountA2statedA2inA2theA2conditionsA2partA2orA2
portionA2partA2ofA2theA2policy?A2-A2Ans--No

TheA2__________A2partA2orA2portionA2ofA2aA2propertyA2policyA2setsA2forthA2theA2rights,A2rul
es,A2duties,A2andA2obligationsA2ofA2theA2insurerA2andA2insuredA2toA2beA2followedA2through
outA2theA2policyA2period.A2-A2Ans--Conditions

TheA2______________A2ClauseA2allowsA2insurersA2toA2automaticallyA2broadenA2coverag
eA2withoutA2endorsementA2onA2existingA2policiesA2withA2noA2increaseA2inA2premium.A2-
A2Ans--Liberalization


WhenA2aA2propertyA2policyA2hasA2beenA2inA2effectA2lessA2thanA260A2daysA2andA2theA2insur
erA2cancelsA2forA2theA2nonpaymentA2ofA2premium,A2theA2insurerA2mustA2giveA2theA2insure
dA2____A2daysA2writtenA2notice.A2-A2Ans--10

CouldA2anA2orderA2toA2vacateA2theA2propertyA2possiblyA2causeA2anA2insurerA2toA2cancelA2a
A2commercialA2propertyA2policy?A2-A2Ans--Yes


AnA2insurerA2mayA2nonrenewA2aA2homeownersA2policyA2withA2oralA2noticeA2toA2theA2insur
ed.A2TrueA2orA2False?A2-A2Ans--False

TheA2insured'sA2transferA2ofA2rightA2ofA2ownershipA2orA2interestA2inA2anA2insuranceA2policy
A2toA2anotherA2partyA2withA2theA2insurer'sA2writtenA2consentA2isA2knownA2asA2anA2_______
___.A2-A2Ans--Assignment

___________A2transfersA2anA2insured'sA2legalA2rightA2ofA2recoveryA2toA2theA2insurerA2that
A2paidA2theA2claim.A2-A2Ans--Subrogation


WhenA2anA2insuredA2suffersA2aA2loss,A2theyA2areA2requiredA2toA2prepareA2anA2inventoryA2o
fA2theA2damagedA2propertyA2atA2theA2________A2request.A2-A2Ans--Insurers

InA2theA2eventA2ofA2aA2lossA2underA2aA2homeownersA2policy,A2aA2proofA2ofA2lossA2mustA2be
A2signedA2andA2swornA2byA2theA2_______.A2-A2Ans--Insured


CompanyA2AA2hasA2issuedA2aA2policyA2inA2theA2amountA2ofA2$200,000,A2andA2companyA2
BA2hasA2issuedA2aA2policyA2inA2theA2amountA2ofA2$300,000.A2underA2theA2otherA2insurance