Personal Lines Insurance Complete Exam
Study Questions with 100% Detailed
Answers | Expert Graded A+
1. Abandonment - ANSWER The act of giving up insured property to another
person or leaving it unattended.
2. Absolute Liability - ANSWER A type of liability that arises from extremely
dangerous operations, such as using explosives or working at extreme
heights.
3. Accident - ANSWER An unexpected event that occurs suddenly and at a
specific place.
4. Auto - ANSWER A land motor vehicle, trailer, or semi-trailer designed for
use on public roads, including attached machinery or equipment. Auto does
not include mobile equipment.
5. Avoidance - ANSWER A risk management method that involves
deliberately staying away from a particular risk. For example, choosing not
to fly in an airplane to avoid the risk of being killed in an airplane crash.
6. Bailee - ANSWER A person or entity that has possession of personal
property entrusted to them by the owner. For example, a television repair
person who has possession of a customer's television would be a bailee.
7. Beneficiary - ANSWER The person who receives the proceeds from an
insurance policy.
,8. Binder - ANSWER A temporary contract that puts an insurance policy into
effect before the premium has been paid.
9. Blanket Bond - ANSWER A type of bond that covers losses caused by
dishonest employees.
10.Blanket Insurance - ANSWER A single property insurance policy that
provides coverage for multiple classes of property at one location or one or
more classes of property at multiple locations.
11.Bodily Injury Liability - ANSWER Legal liability arising from death or
physical trauma to a person as a result of a negligent or purposeful act or
omission by an insured.
12.Boycott - ANSWER An unfair trade practice in which one person refuses to
do business with another until certain conditions are met.
13.Builder's Risk Coverage Form - ANSWER A commercial property form
that covers buildings under construction.
14.Building and Personal Property Coverage Form - ANSWER A commercial
property form that covers buildings and/or their contents.
15.Burglary - ANSWER The act of breaking into another person's premises
with the intent to commit a felony.
,16.Cancellation - ANSWER The termination of an in-force insurance policy by
either the insured or the insurer before the expiration date shown in the
policy.
17.Casualty Insurance - ANSWER A type of insurance that covers losses
caused by injury to persons or damage to the property of others.
18.Cease and Desist Order - ANSWER A demand for a person to stop
committing an action that violates a provision.
19.Certificate of Authority - ANSWER A document that authorizes a company
to start conducting business and specifies the types of insurance the
company can transact. It is illegal for an insurance company to transact
insurance without this certificate.
20.Certificate of Insurance - ANSWER A legal document that indicates an
insurance policy has been issued and states the amounts and types of
insurance provided.
21.Actual Cash Value (ACV) - ANSWER The amount required to compensate
for property loss or damages, calculated based on the property's current
replacement value minus depreciation.
22.Additional Coverage - ANSWER A provision in an insurance policy that
allows for additional coverage for specific loss expenses without an increase
in premium.
23.Additional Insureds - ANSWER Individuals or businesses that are protected
by the policy but are not named as insured on the declaration page, usually
in regard to a specific interest.
, 24.Adhesion - ANSWER A contract offered by an insurer on a 'take-it-or-
leave-it' basis, where the insured's only option is to accept or reject the
contract. Any ambiguities in the contract will be resolved in favor of the
insured.
25.Admitted Insurer - ANSWER An insurance company authorized and
licensed to conduct business in a specific state.
26.Adverse Selection - ANSWER The tendency of risks with a higher
probability of loss to purchase and maintain insurance more often than risks
with a lower probability.
27.Agent - ANSWER An individual who is licensed to sell, negotiate, or effect
insurance contracts on behalf of an insurer.
28.Aggregate Limit - ANSWER The maximum amount of coverage available
under a liability policy during a policy year, regardless of the number of
claims or accidents.
29.Agreed Value - ANSWER A provision in a property policy where the
insurer and insured agree upon the amount of insurance that represents a fair
valuation for the property at the time the insurance is written.
30.Aleatory - ANSWER A contract in which the participating parties agree to
exchange unequal amounts. Insurance contracts are aleatory because the
premiums paid by the insured are unequal to the amount the insurer will pay
in the event of a loss.
Study Questions with 100% Detailed
Answers | Expert Graded A+
1. Abandonment - ANSWER The act of giving up insured property to another
person or leaving it unattended.
2. Absolute Liability - ANSWER A type of liability that arises from extremely
dangerous operations, such as using explosives or working at extreme
heights.
3. Accident - ANSWER An unexpected event that occurs suddenly and at a
specific place.
4. Auto - ANSWER A land motor vehicle, trailer, or semi-trailer designed for
use on public roads, including attached machinery or equipment. Auto does
not include mobile equipment.
5. Avoidance - ANSWER A risk management method that involves
deliberately staying away from a particular risk. For example, choosing not
to fly in an airplane to avoid the risk of being killed in an airplane crash.
6. Bailee - ANSWER A person or entity that has possession of personal
property entrusted to them by the owner. For example, a television repair
person who has possession of a customer's television would be a bailee.
7. Beneficiary - ANSWER The person who receives the proceeds from an
insurance policy.
,8. Binder - ANSWER A temporary contract that puts an insurance policy into
effect before the premium has been paid.
9. Blanket Bond - ANSWER A type of bond that covers losses caused by
dishonest employees.
10.Blanket Insurance - ANSWER A single property insurance policy that
provides coverage for multiple classes of property at one location or one or
more classes of property at multiple locations.
11.Bodily Injury Liability - ANSWER Legal liability arising from death or
physical trauma to a person as a result of a negligent or purposeful act or
omission by an insured.
12.Boycott - ANSWER An unfair trade practice in which one person refuses to
do business with another until certain conditions are met.
13.Builder's Risk Coverage Form - ANSWER A commercial property form
that covers buildings under construction.
14.Building and Personal Property Coverage Form - ANSWER A commercial
property form that covers buildings and/or their contents.
15.Burglary - ANSWER The act of breaking into another person's premises
with the intent to commit a felony.
,16.Cancellation - ANSWER The termination of an in-force insurance policy by
either the insured or the insurer before the expiration date shown in the
policy.
17.Casualty Insurance - ANSWER A type of insurance that covers losses
caused by injury to persons or damage to the property of others.
18.Cease and Desist Order - ANSWER A demand for a person to stop
committing an action that violates a provision.
19.Certificate of Authority - ANSWER A document that authorizes a company
to start conducting business and specifies the types of insurance the
company can transact. It is illegal for an insurance company to transact
insurance without this certificate.
20.Certificate of Insurance - ANSWER A legal document that indicates an
insurance policy has been issued and states the amounts and types of
insurance provided.
21.Actual Cash Value (ACV) - ANSWER The amount required to compensate
for property loss or damages, calculated based on the property's current
replacement value minus depreciation.
22.Additional Coverage - ANSWER A provision in an insurance policy that
allows for additional coverage for specific loss expenses without an increase
in premium.
23.Additional Insureds - ANSWER Individuals or businesses that are protected
by the policy but are not named as insured on the declaration page, usually
in regard to a specific interest.
, 24.Adhesion - ANSWER A contract offered by an insurer on a 'take-it-or-
leave-it' basis, where the insured's only option is to accept or reject the
contract. Any ambiguities in the contract will be resolved in favor of the
insured.
25.Admitted Insurer - ANSWER An insurance company authorized and
licensed to conduct business in a specific state.
26.Adverse Selection - ANSWER The tendency of risks with a higher
probability of loss to purchase and maintain insurance more often than risks
with a lower probability.
27.Agent - ANSWER An individual who is licensed to sell, negotiate, or effect
insurance contracts on behalf of an insurer.
28.Aggregate Limit - ANSWER The maximum amount of coverage available
under a liability policy during a policy year, regardless of the number of
claims or accidents.
29.Agreed Value - ANSWER A provision in a property policy where the
insurer and insured agree upon the amount of insurance that represents a fair
valuation for the property at the time the insurance is written.
30.Aleatory - ANSWER A contract in which the participating parties agree to
exchange unequal amounts. Insurance contracts are aleatory because the
premiums paid by the insured are unequal to the amount the insurer will pay
in the event of a loss.
