Personal Lines Alabama State Exam Questions And Answers Verified 100% Correct

Personal Lines Alabama State Exam Questions And Answers Verified 100% Correct A risk that involves both the chance of loss or gain is - ANSWER -Speculative risk If you wreck your car and cause $5,000 worth of damage the value of your car will be reduced. This example best illustrates what insurance principle? - ANSWER -Insurable interest Joe purchases a new home with a replacement value of $420,000. He then insures it for $300,000 with a $500 deductible. If Joe has a covered loss of $30,000. How much will his insurance company pay? - ANSWER -$26,200 A nonexclusive agent represents: - ANSWER -More than one insurance company A hazard is defined as: - ANSWER -A condition that increases the chance that a loss will occur. Insureds who meet the financial requirements and are approved to transact business in the state are considered _________ or ________ into the state as a legal insurer. - ANSWER -Authorized/Admitted Of the following, which is not considered to be a risk management tool? - ANSWER -Obligatory The tendency for people with a greater-than average risk to purchase insurance is called: - ANSWER -Adverse selection A written modification that either adds or deletes coverage in a policy is called: - ANSWER -An endorsement Vacancy means only the absense of people - ANSWER -False Betty is approached by a person in the company parking desk that demands her purse or he will shoot her. This would be considered - ANSWER -Robbery The part of a policy that eliminates coverage for certain perils is called: - ANSWER -The exclusions A society of members both corporate and individual who underwrite in syndicates on whose behalf professional underwriters accept risk is called: - ANSWER Lloyds associations A term that represents an insurers average future claim costs and loss- adjustment expenses would be called: - ANSWER -Loss costs What type of risk is insuring your home or auto? - ANSWER -Pure risk A good definition for risk is: - ANSWER -The chance of loss The primary insured in an insurance contract is the: - ANSWER -First named insured In property insurance, coinsurance is designed to: - ANSWER -Cover all losses in full if you purchase at least 80% insurance to value All of the following are correct about binders EXCEPT: - ANSWER -The binder is good for a set number of days, or until the policy is issued, whichever is longer. Which risk management method is used when you decide to purchase insurance to cover a risk? - ANSWER -None of the above A risk management method where one party agrees to release the other party from any liability or damage that might arise out of the transaction involved is called: - ANSWER -A hold-harmless agreement