Alabama Property and Casualty Sample questions with correct answers

What is a hazard? CORRECT ANSWER an increase in the possibility that a loss might occur transfer risk from a person or business to an insurance company that agrees to to pay for losses in exchange for a premium. CORRECT ANSWER insurance The type of insurance company in which the policyholder is considered an owner, with the right to vote and share in the profits is a CORRECT ANSWER mutual company Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the final mortgage payment to FBN Mortgage Company. Jewel is considering selling her home to her niece, Cynthia. Who has an insurable interest in the home? CORRECT ANSWER Jewel Canford Risk of loss is a speculative risk CORRECT ANSWER Which one of the following is NOT an element of insurability? a. Loss must be calculable b. Risk of loss must represent a financial harship c. Cost of insurance must be affordable d. Risk of loss is a speculative risk The principle that states that an insur