Personal Lines Final Exam 2025/2026 QUESTIONS AND
ANSWERS GUARANTEE A+
The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying a premium
2. Guarantees claim payments will be divided as the interests of the insurance and mortgagee
appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2 - C. Both 1 & 2
Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's property
D. Owning property - A. Being named in someone's will as an heir
The plumbing in Mrs. Ward's home suddenly burst and the ceilings were damaged by water.
Which of the following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7` - B. HO2
,Nicole has a Personal Auto policy with limits of 10/20/10 for liability coverage. She causes an
accident that results in $12,000 bodily injury damages to the other driver and $5,000 in property
damage to the other driver's car. How much would Nicole's policy pay for the the BI and PD
losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000 - A. $15,000
Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance. Agent Dufus explains to
Ms. Smith that flood coverage can be purchased directly through the NFIP or through him.
Should Ms. Smith choose to purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above - A. Write your own program
The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses - D. The number of insureds,
the easier it is to estimate their losses
A sudden, unintended, and unexpected event is known as:
, A. Negligence
B. Warranty
C. Accident
D. Occurrence - C. Accident
The Commissioner of Insurance in the State of Indiana is appointed by which of the following:
A. The chairman of the Banking & Insurance Commission
B. He is not appointed, but elected
C. The Attorney General
D. The Governor - D. The Governor
Which of the following conditions of a property policy describes the procedure for an insured to
use in a disagreement with the insurer about the amount of a loss?
A. Pro-rata liability
B. Subrogation
C. Audit
D. Appraisal - D. Appraisal
The privacy notice must be issued to the policyowner every:
A. 1 year
B. 2 years
C. 3 years
D. 4 years - A. 1 year
ANSWERS GUARANTEE A+
The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying a premium
2. Guarantees claim payments will be divided as the interests of the insurance and mortgagee
appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2 - C. Both 1 & 2
Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's property
D. Owning property - A. Being named in someone's will as an heir
The plumbing in Mrs. Ward's home suddenly burst and the ceilings were damaged by water.
Which of the following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7` - B. HO2
,Nicole has a Personal Auto policy with limits of 10/20/10 for liability coverage. She causes an
accident that results in $12,000 bodily injury damages to the other driver and $5,000 in property
damage to the other driver's car. How much would Nicole's policy pay for the the BI and PD
losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000 - A. $15,000
Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance. Agent Dufus explains to
Ms. Smith that flood coverage can be purchased directly through the NFIP or through him.
Should Ms. Smith choose to purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above - A. Write your own program
The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses - D. The number of insureds,
the easier it is to estimate their losses
A sudden, unintended, and unexpected event is known as:
, A. Negligence
B. Warranty
C. Accident
D. Occurrence - C. Accident
The Commissioner of Insurance in the State of Indiana is appointed by which of the following:
A. The chairman of the Banking & Insurance Commission
B. He is not appointed, but elected
C. The Attorney General
D. The Governor - D. The Governor
Which of the following conditions of a property policy describes the procedure for an insured to
use in a disagreement with the insurer about the amount of a loss?
A. Pro-rata liability
B. Subrogation
C. Audit
D. Appraisal - D. Appraisal
The privacy notice must be issued to the policyowner every:
A. 1 year
B. 2 years
C. 3 years
D. 4 years - A. 1 year
