PERSONAL LINES INSURANCE TEST PAPER 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔_________ _________ is a situation where there are two causes resulting in a loss,
with one of the causes excluded and the other cause of loss not excluded. -
✔✔Concurrent Causation
✔✔If two or more policies provide identical coverage for the same risk, the policies are
deemed to be __________. - ✔✔Concurrent
✔✔Policy A is written for $100,000, and an excess Policy B is written for $200,000 on
the same property. In the event of a $20,000 loss, how much will each policy pay? -
✔✔A= $20,000 ; B= $0
✔✔A building that has neither occupants nor personal property is ______. - ✔✔Vacant
✔✔When property is damaged by fire, the loss is said to be a(n) ______ loss. -
✔✔Direct
✔✔If a fire on a premises caused a power outage, which caused meat in the freezer to
spoil, would the meat spoilage be considered a direct loss or indirect loss? - ✔✔Indirect
Loss
✔✔Open peril policies include losses caused by theft. True or False? - ✔✔True
✔✔If a property owner does not desire any deduction for depreciation following a
covered loss, he/she should purchase a ___________ ____ policy. - ✔✔Replacement
Cost
✔✔For replacement cost coverage to apply in dwelling policies, the insured must carry
insurance at least equal to ____% of the cost of replacement of the building. - ✔✔80
✔✔Would a stated amount method of valuation likely be used when insuring gold
bullion? - ✔✔No
✔✔An ____ policy is one that the value of the subject matter is not agreed upon, but is
left to be ascertained in case of loss. - ✔✔Open
✔✔A valued policy is one that expresses on it's face an agreement that the thing
insured is valued at a specific sum. True or False? - ✔✔True
,✔✔Insuring more than one property on one policy for a single amount of insurance that
applies to all properties covered under the policy is known as _______ coverage. -
✔✔Blanket
✔✔The name of the insured is found on the declarations page of the policy. True or
False? - ✔✔True
✔✔What part or portion of a property policy contains the effective or expiration dates of
the policy? - ✔✔Declarations
✔✔Are the insurer's limits of insurance amount stated in the conditions part or portion
part of the policy? - ✔✔No
✔✔The __________ part or portion of a property policy sets forth the rights, rules,
duties, and obligations of the insurer and insured to be followed throughout the policy
period. - ✔✔Conditions
✔✔The ______________ Clause allows insurers to automatically broaden coverage
without endorsement on existing policies with no increase in premium. -
✔✔Liberalization
✔✔When a property policy has been in effect less than 60 days and the insurer cancels
for the nonpayment of premium, the insurer must give the insured ____ days written
notice. - ✔✔10
✔✔Could an order to vacate the property possibly cause an insurer to cancel a
commercial property policy? - ✔✔Yes
✔✔An insurer may nonrenew a homeowners policy with oral notice to the insured. True
or False? - ✔✔False
✔✔The insured's transfer of right of ownership or interest in an insurance policy to
another party with the insurer's written consent is known as an __________. -
✔✔Assignment
✔✔___________ transfers an insured's legal right of recovery to the insurer that paid
the claim. - ✔✔Subrogation
✔✔When an insured suffers a loss, they are required to prepare an inventory of the
damaged property at the ________ request. - ✔✔Insurers
, ✔✔In the event of a loss under a homeowners policy, a proof of loss must be signed
and sworn by the _______. - ✔✔Insured
✔✔Company A has issued a policy in the amount of $200,000, and company B has
issued a policy in the amount of $300,000. under the other insurance or pro rata liability
condition or provision, how much will company A pay of a $100,000 loss? - ✔✔$40,000
✔✔The _________ portion of the policy specifies the causes of loss perils not covered,
or property not covered. - ✔✔Exclusions
✔✔An amendment that is attached to a property insurance policy to broaden or restrict
coverage, or further define certain policy provisions is known as a(n) ___________. -
✔✔Endorsement
✔✔Under a commercial lines property policy, who is responsible for making the
premium payments in a timely manner? - ✔✔First Named Insured
✔✔Under a commercial lines property policy, who has the right to request changes to
the policy, and the right to recieve any return of premium? - ✔✔First Named Insured
✔✔Essentially, the higher the deductible that the insured chooses, the higher the
premium will be. True or False? - ✔✔False
✔✔Whenever a personal property policy is cancelled or surrendered the unearned
premium is to be tendered to the insured, or insurance agent of record for the
transmittal to the insured, within ____ days of the cancellation or surrender. - ✔✔25
✔✔A dwelling containing 5 apartment units would be eligible for coverage under a
dwelling policy. True or False? - ✔✔False
✔✔Losses to the dwelling, other structures, and contents are paid on an actual cash
value basis under a DP-1. - ✔✔True
✔✔Smoke damaged caused from nearby industrial operations is or is not covered
under a DP-2 broad form. - ✔✔Is Not
✔✔In the event of a loss, the DP-2 broad form pays for damage to the dwelling on a
___________ ____ basis. - ✔✔Replacement Cost
✔✔Under a DP-3 special form, fixtures that are apart of a dwelling which is not under
construction or that has not been vacant for more than 30 days are covered for theft.
True or False? - ✔✔True
QUESTIONS AND SOLUTIONS RATED A+
✔✔_________ _________ is a situation where there are two causes resulting in a loss,
with one of the causes excluded and the other cause of loss not excluded. -
✔✔Concurrent Causation
✔✔If two or more policies provide identical coverage for the same risk, the policies are
deemed to be __________. - ✔✔Concurrent
✔✔Policy A is written for $100,000, and an excess Policy B is written for $200,000 on
the same property. In the event of a $20,000 loss, how much will each policy pay? -
✔✔A= $20,000 ; B= $0
✔✔A building that has neither occupants nor personal property is ______. - ✔✔Vacant
✔✔When property is damaged by fire, the loss is said to be a(n) ______ loss. -
✔✔Direct
✔✔If a fire on a premises caused a power outage, which caused meat in the freezer to
spoil, would the meat spoilage be considered a direct loss or indirect loss? - ✔✔Indirect
Loss
✔✔Open peril policies include losses caused by theft. True or False? - ✔✔True
✔✔If a property owner does not desire any deduction for depreciation following a
covered loss, he/she should purchase a ___________ ____ policy. - ✔✔Replacement
Cost
✔✔For replacement cost coverage to apply in dwelling policies, the insured must carry
insurance at least equal to ____% of the cost of replacement of the building. - ✔✔80
✔✔Would a stated amount method of valuation likely be used when insuring gold
bullion? - ✔✔No
✔✔An ____ policy is one that the value of the subject matter is not agreed upon, but is
left to be ascertained in case of loss. - ✔✔Open
✔✔A valued policy is one that expresses on it's face an agreement that the thing
insured is valued at a specific sum. True or False? - ✔✔True
,✔✔Insuring more than one property on one policy for a single amount of insurance that
applies to all properties covered under the policy is known as _______ coverage. -
✔✔Blanket
✔✔The name of the insured is found on the declarations page of the policy. True or
False? - ✔✔True
✔✔What part or portion of a property policy contains the effective or expiration dates of
the policy? - ✔✔Declarations
✔✔Are the insurer's limits of insurance amount stated in the conditions part or portion
part of the policy? - ✔✔No
✔✔The __________ part or portion of a property policy sets forth the rights, rules,
duties, and obligations of the insurer and insured to be followed throughout the policy
period. - ✔✔Conditions
✔✔The ______________ Clause allows insurers to automatically broaden coverage
without endorsement on existing policies with no increase in premium. -
✔✔Liberalization
✔✔When a property policy has been in effect less than 60 days and the insurer cancels
for the nonpayment of premium, the insurer must give the insured ____ days written
notice. - ✔✔10
✔✔Could an order to vacate the property possibly cause an insurer to cancel a
commercial property policy? - ✔✔Yes
✔✔An insurer may nonrenew a homeowners policy with oral notice to the insured. True
or False? - ✔✔False
✔✔The insured's transfer of right of ownership or interest in an insurance policy to
another party with the insurer's written consent is known as an __________. -
✔✔Assignment
✔✔___________ transfers an insured's legal right of recovery to the insurer that paid
the claim. - ✔✔Subrogation
✔✔When an insured suffers a loss, they are required to prepare an inventory of the
damaged property at the ________ request. - ✔✔Insurers
, ✔✔In the event of a loss under a homeowners policy, a proof of loss must be signed
and sworn by the _______. - ✔✔Insured
✔✔Company A has issued a policy in the amount of $200,000, and company B has
issued a policy in the amount of $300,000. under the other insurance or pro rata liability
condition or provision, how much will company A pay of a $100,000 loss? - ✔✔$40,000
✔✔The _________ portion of the policy specifies the causes of loss perils not covered,
or property not covered. - ✔✔Exclusions
✔✔An amendment that is attached to a property insurance policy to broaden or restrict
coverage, or further define certain policy provisions is known as a(n) ___________. -
✔✔Endorsement
✔✔Under a commercial lines property policy, who is responsible for making the
premium payments in a timely manner? - ✔✔First Named Insured
✔✔Under a commercial lines property policy, who has the right to request changes to
the policy, and the right to recieve any return of premium? - ✔✔First Named Insured
✔✔Essentially, the higher the deductible that the insured chooses, the higher the
premium will be. True or False? - ✔✔False
✔✔Whenever a personal property policy is cancelled or surrendered the unearned
premium is to be tendered to the insured, or insurance agent of record for the
transmittal to the insured, within ____ days of the cancellation or surrender. - ✔✔25
✔✔A dwelling containing 5 apartment units would be eligible for coverage under a
dwelling policy. True or False? - ✔✔False
✔✔Losses to the dwelling, other structures, and contents are paid on an actual cash
value basis under a DP-1. - ✔✔True
✔✔Smoke damaged caused from nearby industrial operations is or is not covered
under a DP-2 broad form. - ✔✔Is Not
✔✔In the event of a loss, the DP-2 broad form pays for damage to the dwelling on a
___________ ____ basis. - ✔✔Replacement Cost
✔✔Under a DP-3 special form, fixtures that are apart of a dwelling which is not under
construction or that has not been vacant for more than 30 days are covered for theft.
True or False? - ✔✔True
