PERSONAL LINES FINAL EXAM WITH ALL ANSWERS

Personal Lines Final Exam With All b b b b b




Answers b




Statements made in the application are considered: b
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A. Warranties
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B. Representations
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C. Possible Concealments
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D. None of the Above - correct answer-B. Representations
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The definition of Risk is:
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A. Uncertainty regarding loss
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B. A chance of gain
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C. Uncertainty regarding gain or profit
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D. Intended unforseen damage to property for gain or profit - correct answer-A.
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Uncertainty regarding loss
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A financial device for transferring or shifting risk from an individual or entity to a
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large group with the same risk is the definition of:
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A. Avoidanceb
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B. Retentionb
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C. Transfer b b


D. Insurance - correct answer-D. Insurance
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Hazards include which of the following: b b b
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1. Unintended oily rags stacked in a corner
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2. A homeowner's carelessness because he has insurance
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A. 1 only b
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B. 2 only b
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C. Both 1 & 2
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D. Neither 1 or 2 - correct answer-C. Both 1 & 2
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The mortgage condition in a property policy:
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1. Guarantees that the lending institutions may act for itself in paying a premium
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2. Guarantees claim payments will be divided as the interests of the insurance and
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mortgagee appear
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A. 1 only b
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B. 2 only b
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, C. Both 1 & 2
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D. Neither 1 nor 2 - correct answer-C. Both 1 & 2
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Which of the following situations does NOT create an insurable interest?
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A. Being named in someone's will as an heir
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B. Holding a mortgage or lien on property
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C. Having custody or control of someone else's property
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D. Owning property - correct answer-A. Being named in someone's will as an heir
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The plumbing in Mrs. Ward's home suddenly burst and the ceilings were damaged
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by water. Which of the following homeowner forms would cover the loss?
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A. HO1 b
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B. HO2 b
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D. HO7` - correct answer-B. HO2
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Nicole has a Personal Auto policy with limits of 10/20/10 for liability coverage. She
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causes an accident that results in $12,000 bodily injury damages to the other
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driver and $5,000 in property damage to the other driver's car. How much would
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Nicole's policy pay for the the BI and PD losses?
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A. $15,000
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B. $17,000
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C. $10,000
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D. $12,000 - correct answer-A. $15,000
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Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance. Agent
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Dufus explains to Ms. Smith that flood coverage can be purchased directly through
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the NFIP or through him. Should Ms. Smith choose to purchase coverage through
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Agent Dufus it is called the:
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A. Write your own program
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B. Create flood insurance program
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C. Flood insurance is not available through private insurers
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D. None of the Above - correct answer-A. Write your own program
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The law of large numbers state that the larger...
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A. The number of insured, the more likely they will have losses
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B. A company, the more profit it will make
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C. The chance of loss, the higher the premium
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D. The number of insureds, the easier it is to estimate their losses - correct
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answer-D. The number of insureds, the easier it is to estimate their losses
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A sudden, unintended, and unexpected event is known as:
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A. Negligence
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B. Warranty
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C. Accident
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