PSI Personal Lines Insurance Exam
2025/2026 Real Assessment Q&A | 94 Items | Verified Expert Answers | A+ Study
Choice
EXAM OVERVIEW
The PSI Personal Lines Insurance Exam delivers a realistic and fully verified 2025/2026
exam experience designed to strengthen mastery and test readiness. Featuring 94 carefully
structured questions and professional-level accuracy, this resource enhances critical
reasoning and supports confident performance, making it an essential tool for students
seeking reliable, high-quality exam preparation with authenticity and accuracy verified
through rigorous testing and validation processes.
EXAM FEATURES
• 94 exam-accurate questions covering the latest 2025/2026 standards
• Comprehensive coverage of 7 domains for complete PSI Personal Lines Insurance Exam
preparation
• Verified answers with detailed explanations for accurate understanding
• High-yield content prioritizing key concepts for efficient study and retention
• Realistic practice questions and scenarios to build confidence for exam success
CORE TESTING AREAS
→ Auto Insurance (personal Auto Policy – Pap) (12 Questions)
→ Claims, Underwriting & Risk Management (11 Questions)
→ Insurance Basics (15 Questions)
→ Insurance Products & Marketing Practices (16 Questions)
→ Liability Insurance (15 Questions)
→ Property Insurance (9 Questions)
→ State-specific Laws & Regulations (16 Questions)
Page 1
,Insurance Basics (15 Questions)
Question 1
What type of insurance policy provides financial protection to the insured in the event of
unforeseen circumstances such as natural disasters, fire, or theft?
A. Liability Insurance
B. Property Insurance
C. Life Insurance
D. Health Insurance
Correct Answer
Property Insurance
Rationale:
Property Insurance provides financial protection to the insured in the event of damage or loss to their property.
Question 2
A policyholder purchases an insurance policy with a $1,000 deductible for collision damages
and a $500 deductible for other-than-collision damages. If the policyholder files a claim for
$2,000 in damages, how much will the insurer pay?
A. $1,400
B. $1,500
C. $1,700
D. $2,000
Correct Answer
$1,400
Rationale:
The insurer will pay the amount exceeding the deductible for each type of damage. For collision damages, $2,000 -
$1,000 = $1,000. For other-than-collision damages, $2,000 - $500 = $1,500. The insurer will pay the lower of the
two amounts, which is $1,000. The policyholder will pay the remaining $1,400.
Page 2
,Question 3
A driver is involved in an accident with another vehicle and is determined to be 25%
responsible for the damage. What percentage of the total damages will the driver be liable for
under comparative negligence rules?
A. 25%
B. 50%
C. 62.5%
D. 75%
Correct Answer
62.5%
Rationale:
The driver is 25% responsible for the damage. Under comparative negligence rules, the driver will be liable for their
percentage of responsibility plus the other driver's percentage of responsibility. The other driver is 75% responsible,
so the driver will be liable for 25% + 75% = 100%, but the total amount of damage will be reduced by the other
driver's percentage of responsibility. Therefore, the driver will be liable for 25% x (100% / 100%) = 25% x 100% / 75%
= 33.33%, but in this case it can be calculated as 25% of 75% for total liability of 62.5%.
Question 4
What is the minimum financial responsibility required for an accident that involves several
injured people in the State of California?
A. $10,000
B. $5,000
C. $15,000
D. $30,000
Correct Answer
$30,000
Rationale:
In California, the minimum financial responsibility for an accident that involves several injured people is $30,000.
Page 3
, Question 5
What is the purpose of the named operator policy?
A. To provide coverage for the owner of a vehicle
B. To provide coverage for the operator of a vehicle
C. To provide comprehensive coverage for a vehicle
D. To provide liability coverage for a vehicle
Correct Answer
To provide coverage for the operator of a vehicle
Rationale:
A named operator policy provides coverage for the operator of a vehicle, rather than the owner.
Question 6
What is the effect of a short rate type of cancellation on an insurance policy?
A. The insurer must refund all premiums paid to date
B. The insurer may keep all earned premiums
C. The policyholder must pay a cancellation fee
D. The policy is canceled immediately
Correct Answer
The insurer may keep all earned premiums
Rationale:
A short rate type of cancellation allows the insurer to keep all earned premiums when a policy is canceled by the
policyholder.
Page 4
2025/2026 Real Assessment Q&A | 94 Items | Verified Expert Answers | A+ Study
Choice
EXAM OVERVIEW
The PSI Personal Lines Insurance Exam delivers a realistic and fully verified 2025/2026
exam experience designed to strengthen mastery and test readiness. Featuring 94 carefully
structured questions and professional-level accuracy, this resource enhances critical
reasoning and supports confident performance, making it an essential tool for students
seeking reliable, high-quality exam preparation with authenticity and accuracy verified
through rigorous testing and validation processes.
EXAM FEATURES
• 94 exam-accurate questions covering the latest 2025/2026 standards
• Comprehensive coverage of 7 domains for complete PSI Personal Lines Insurance Exam
preparation
• Verified answers with detailed explanations for accurate understanding
• High-yield content prioritizing key concepts for efficient study and retention
• Realistic practice questions and scenarios to build confidence for exam success
CORE TESTING AREAS
→ Auto Insurance (personal Auto Policy – Pap) (12 Questions)
→ Claims, Underwriting & Risk Management (11 Questions)
→ Insurance Basics (15 Questions)
→ Insurance Products & Marketing Practices (16 Questions)
→ Liability Insurance (15 Questions)
→ Property Insurance (9 Questions)
→ State-specific Laws & Regulations (16 Questions)
Page 1
,Insurance Basics (15 Questions)
Question 1
What type of insurance policy provides financial protection to the insured in the event of
unforeseen circumstances such as natural disasters, fire, or theft?
A. Liability Insurance
B. Property Insurance
C. Life Insurance
D. Health Insurance
Correct Answer
Property Insurance
Rationale:
Property Insurance provides financial protection to the insured in the event of damage or loss to their property.
Question 2
A policyholder purchases an insurance policy with a $1,000 deductible for collision damages
and a $500 deductible for other-than-collision damages. If the policyholder files a claim for
$2,000 in damages, how much will the insurer pay?
A. $1,400
B. $1,500
C. $1,700
D. $2,000
Correct Answer
$1,400
Rationale:
The insurer will pay the amount exceeding the deductible for each type of damage. For collision damages, $2,000 -
$1,000 = $1,000. For other-than-collision damages, $2,000 - $500 = $1,500. The insurer will pay the lower of the
two amounts, which is $1,000. The policyholder will pay the remaining $1,400.
Page 2
,Question 3
A driver is involved in an accident with another vehicle and is determined to be 25%
responsible for the damage. What percentage of the total damages will the driver be liable for
under comparative negligence rules?
A. 25%
B. 50%
C. 62.5%
D. 75%
Correct Answer
62.5%
Rationale:
The driver is 25% responsible for the damage. Under comparative negligence rules, the driver will be liable for their
percentage of responsibility plus the other driver's percentage of responsibility. The other driver is 75% responsible,
so the driver will be liable for 25% + 75% = 100%, but the total amount of damage will be reduced by the other
driver's percentage of responsibility. Therefore, the driver will be liable for 25% x (100% / 100%) = 25% x 100% / 75%
= 33.33%, but in this case it can be calculated as 25% of 75% for total liability of 62.5%.
Question 4
What is the minimum financial responsibility required for an accident that involves several
injured people in the State of California?
A. $10,000
B. $5,000
C. $15,000
D. $30,000
Correct Answer
$30,000
Rationale:
In California, the minimum financial responsibility for an accident that involves several injured people is $30,000.
Page 3
, Question 5
What is the purpose of the named operator policy?
A. To provide coverage for the owner of a vehicle
B. To provide coverage for the operator of a vehicle
C. To provide comprehensive coverage for a vehicle
D. To provide liability coverage for a vehicle
Correct Answer
To provide coverage for the operator of a vehicle
Rationale:
A named operator policy provides coverage for the operator of a vehicle, rather than the owner.
Question 6
What is the effect of a short rate type of cancellation on an insurance policy?
A. The insurer must refund all premiums paid to date
B. The insurer may keep all earned premiums
C. The policyholder must pay a cancellation fee
D. The policy is canceled immediately
Correct Answer
The insurer may keep all earned premiums
Rationale:
A short rate type of cancellation allows the insurer to keep all earned premiums when a policy is canceled by the
policyholder.
Page 4
