Insurance Practice Test Exam Questions And Answers
Verified 100% Correct
The Standard Fire Policy is also known by a nickname: The "___ " Policy.
A. 165 Line
B. 1918
C. Original
D. Monoline - ANSWER A. 165 Line
Which of the following statements does NOT apply to the Standard Fire Policy? A.
It is the basis for all homeowners policies.
B. It pays actual cash value.
C. It automatically covers wind and vandalism.
D. It is a named peril policy. - ANSWER C. It automatically covers wind and vandalism.
Coverage C - Personal Property of a homeowners policy typically excludes:
A. furniture.
B. fish.
C. dishes.
D. blanket coverage of personal property. - ANSWER B. fish.
How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage
in a homeowners policy? - ANSWER $500
Who is NOT eligible for a homeowners policy?
A. An owner of a home under construction
B. A person who owns and lives in his house
C. A tenant who rents a home or apartment
D. An owner of a house in which he does not live, but rents to a tenant - ANSWER D.
An owner of a house in which he does not live, but rents to a tenant
Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how
much can Tim receive for his stolen trailer when he files a claim against his
homeowners policy?
A. $2,000
B. $2,500
C. $1,000
D. $1,500 - ANSWER D. $1,500
,The Alabama Homeowners Bill of Rights outlines a policyholder's right to: A.
cancel a policy and receive a refund of all paid premiums.
B. ongoing insurance coverage.
C. reject any settlement amount that the insurer offers.
D. file a complaint against the Commissioner and receive a written response. -
ANSWER C. reject any settlement amount that the insurer offers.
The DP-3 is known as the: A.
Broad Form.
B. Special Form.
C. Basic Form.
D. Amended Form. - ANSWER B. Special Form.
Dwelling policies cover: A.
liability only.
B. rental properties only.
C. property, and liability with an endorsement.
D. property only. - ANSWER C. property, and liability with an endorsement.
A dwelling policy would NOT
be appropriate for:
A. a duplex owned by
an individual.
B. a single-family home
wholly rented out.
C. a four-plex owned by a
corporation.
D. a motorhome owned by an individual. -
ANSWER D. a motorhome owned by an
individual.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could
this coverage pay for?
A. Bonnie rear-ends another vehicle.
B. Bonnie's car catches fire.
C. Bonnie rolls her vehicle in a one-car accident.
D. Bonnie's car breaks down due to an engine malfunction. - ANSWER B. Bonnie's car
catches fire.
Babette crosses the street and is struck by a car, causing her to sustain injuries in the
amount of $45,000. The driver has minimum coverage. Which coverage section of
Babette's auto policy could help pay for her medical costs?
A. Part C: Uninsured Motorist Coverage
,B. Part D: Comprehensive Coverage
C. Part B: Medical Payments
D. Part A: Liability - ANSWER C. Part B: Medical Payments
According to the "Definitions" section of a Personal Auto Policy, which of the following
would NOT qualify as a "family member"?
A. The insured's foster child
B. The insured's cousin who is living with the insured
C. The insured's ex-wife who moved out of the house 4 months ago
D. The insured's adopted daughter - ANSWER C. The insured's ex-wife who moved
out of the house 4 months ago
Kate has a Personal Auto Policy through XYZ Insurance. In which of the following
scenarios would XYZ Insurance NOT be allowed immediately to increase Kate's policy
premium?
A. Kate gets married and adds her husband to her personal auto policy.
B. XYZ Insurance adds Comprehensive coverage to Kate's policy, per her request.
C. XYZ Insurance expands coverage for all policies - a change which automatically
applies to Kate's policy, as well.
D. Kate moves and updates her address with XYZ Insurance. - ANSWER C. XYZ
Insurance expands coverage for all policies - a change which automatically applies to
Kate's policy, as well.
Kelly took her eyes off the road and ended up smashing into the back of a passenger
van. All five passengers were injured, and each one ended up with $25,000 in medical
costs. Assuming Kelly has liability coverage with limits of 50/100/50, how much will she
have to pay out of pocket?
A. $50,000
B. $10,000
C. $15,000
D. $25,000 - ANSWER D. $25,000
Medical payments coverage in a Farm policy includes all of the following EXCEPT: A.
libel or slander.
B. funeral costs.
C. hospital benefits.
D. dental benefits. - ANSWER A. libel or slander.
Several cases of listeria have been traced back to Aaron's crop of soybeans that he
recently sold at market. What type of coverage will pay for the claims filed by those
sickened by Aaron's soybeans?
A. Bodily Injury and Property Damage Liability
B. Medical Payments
, C. Farm Product Liability
D. Farm Pollution Liability - ANSWER C. Farm Product Liability
Farmer Scott owns a farm and raises goats, producing a lot of manure. Occasionally,
after a strong rain, some of the waste washes into a nearby river. Which insurance
coverage can protect Scott from any liability caused by the goat waste runoff?
A. Farm Product Liability
B. Custom Farming Liability
C. Farm Livestock-Waste Liability
D. Farm Pollution Liability - ANSWER D. Farm Pollution Liability
Which Farm policy would cover animal waste overflow and chemical spills?
A. Farm Pollution Liability
B. Farm Waste Management Coverage
C. Custom Farming Liability Coverage
D. Farm Product Liability - ANSWER A. Farm Pollution Liability
Due to decreased demand, the market price of beets dropped dramatically during the
recent growing season. Consequently, Michelle's crop of beets did not make as much
money as she was expecting this year, based on her production history and the
harvesttime futures price. However, Michelle is insured for this type of situation. What
kind of insurance does she have? - ANSWER Crop-Revenue
Who sets the critical production dates and assigns commodity market prices for MPCI
policies? - ANSWER The Risk Management Agency
Which of the following statements about MPCI is FALSE? A.
MPCI is a form of crop-revenue insurance.
B. MPCI is subsidized by the FCIC and regulated by the USDA.
C. The government makes insurers make MPCI available to any farmer, but crop-hail
insurers can be selective about who they insure.
D. Coverage is for a percentage of the actual production history (APH) of the farm. -
ANSWER A. MPCI is a form of crop-revenue insurance.
Robert's tomato crop production was well below the revenue guarantee this year, and
Robert files a claim against his Crop-Revenue policy for the low yield. However, the
adjuster denies Robert's claim after completing her inspection. What might be a reason
for the denial? - ANSWER Failure to use the required amount of fertilizer
In order to set a yield guarantee for Maren's policy, Maren's agent will need a record of
the last four years of her crop yields. This record is called: - ANSWER an Actual
Production History.
Verified 100% Correct
The Standard Fire Policy is also known by a nickname: The "___ " Policy.
A. 165 Line
B. 1918
C. Original
D. Monoline - ANSWER A. 165 Line
Which of the following statements does NOT apply to the Standard Fire Policy? A.
It is the basis for all homeowners policies.
B. It pays actual cash value.
C. It automatically covers wind and vandalism.
D. It is a named peril policy. - ANSWER C. It automatically covers wind and vandalism.
Coverage C - Personal Property of a homeowners policy typically excludes:
A. furniture.
B. fish.
C. dishes.
D. blanket coverage of personal property. - ANSWER B. fish.
How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage
in a homeowners policy? - ANSWER $500
Who is NOT eligible for a homeowners policy?
A. An owner of a home under construction
B. A person who owns and lives in his house
C. A tenant who rents a home or apartment
D. An owner of a house in which he does not live, but rents to a tenant - ANSWER D.
An owner of a house in which he does not live, but rents to a tenant
Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how
much can Tim receive for his stolen trailer when he files a claim against his
homeowners policy?
A. $2,000
B. $2,500
C. $1,000
D. $1,500 - ANSWER D. $1,500
,The Alabama Homeowners Bill of Rights outlines a policyholder's right to: A.
cancel a policy and receive a refund of all paid premiums.
B. ongoing insurance coverage.
C. reject any settlement amount that the insurer offers.
D. file a complaint against the Commissioner and receive a written response. -
ANSWER C. reject any settlement amount that the insurer offers.
The DP-3 is known as the: A.
Broad Form.
B. Special Form.
C. Basic Form.
D. Amended Form. - ANSWER B. Special Form.
Dwelling policies cover: A.
liability only.
B. rental properties only.
C. property, and liability with an endorsement.
D. property only. - ANSWER C. property, and liability with an endorsement.
A dwelling policy would NOT
be appropriate for:
A. a duplex owned by
an individual.
B. a single-family home
wholly rented out.
C. a four-plex owned by a
corporation.
D. a motorhome owned by an individual. -
ANSWER D. a motorhome owned by an
individual.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could
this coverage pay for?
A. Bonnie rear-ends another vehicle.
B. Bonnie's car catches fire.
C. Bonnie rolls her vehicle in a one-car accident.
D. Bonnie's car breaks down due to an engine malfunction. - ANSWER B. Bonnie's car
catches fire.
Babette crosses the street and is struck by a car, causing her to sustain injuries in the
amount of $45,000. The driver has minimum coverage. Which coverage section of
Babette's auto policy could help pay for her medical costs?
A. Part C: Uninsured Motorist Coverage
,B. Part D: Comprehensive Coverage
C. Part B: Medical Payments
D. Part A: Liability - ANSWER C. Part B: Medical Payments
According to the "Definitions" section of a Personal Auto Policy, which of the following
would NOT qualify as a "family member"?
A. The insured's foster child
B. The insured's cousin who is living with the insured
C. The insured's ex-wife who moved out of the house 4 months ago
D. The insured's adopted daughter - ANSWER C. The insured's ex-wife who moved
out of the house 4 months ago
Kate has a Personal Auto Policy through XYZ Insurance. In which of the following
scenarios would XYZ Insurance NOT be allowed immediately to increase Kate's policy
premium?
A. Kate gets married and adds her husband to her personal auto policy.
B. XYZ Insurance adds Comprehensive coverage to Kate's policy, per her request.
C. XYZ Insurance expands coverage for all policies - a change which automatically
applies to Kate's policy, as well.
D. Kate moves and updates her address with XYZ Insurance. - ANSWER C. XYZ
Insurance expands coverage for all policies - a change which automatically applies to
Kate's policy, as well.
Kelly took her eyes off the road and ended up smashing into the back of a passenger
van. All five passengers were injured, and each one ended up with $25,000 in medical
costs. Assuming Kelly has liability coverage with limits of 50/100/50, how much will she
have to pay out of pocket?
A. $50,000
B. $10,000
C. $15,000
D. $25,000 - ANSWER D. $25,000
Medical payments coverage in a Farm policy includes all of the following EXCEPT: A.
libel or slander.
B. funeral costs.
C. hospital benefits.
D. dental benefits. - ANSWER A. libel or slander.
Several cases of listeria have been traced back to Aaron's crop of soybeans that he
recently sold at market. What type of coverage will pay for the claims filed by those
sickened by Aaron's soybeans?
A. Bodily Injury and Property Damage Liability
B. Medical Payments
, C. Farm Product Liability
D. Farm Pollution Liability - ANSWER C. Farm Product Liability
Farmer Scott owns a farm and raises goats, producing a lot of manure. Occasionally,
after a strong rain, some of the waste washes into a nearby river. Which insurance
coverage can protect Scott from any liability caused by the goat waste runoff?
A. Farm Product Liability
B. Custom Farming Liability
C. Farm Livestock-Waste Liability
D. Farm Pollution Liability - ANSWER D. Farm Pollution Liability
Which Farm policy would cover animal waste overflow and chemical spills?
A. Farm Pollution Liability
B. Farm Waste Management Coverage
C. Custom Farming Liability Coverage
D. Farm Product Liability - ANSWER A. Farm Pollution Liability
Due to decreased demand, the market price of beets dropped dramatically during the
recent growing season. Consequently, Michelle's crop of beets did not make as much
money as she was expecting this year, based on her production history and the
harvesttime futures price. However, Michelle is insured for this type of situation. What
kind of insurance does she have? - ANSWER Crop-Revenue
Who sets the critical production dates and assigns commodity market prices for MPCI
policies? - ANSWER The Risk Management Agency
Which of the following statements about MPCI is FALSE? A.
MPCI is a form of crop-revenue insurance.
B. MPCI is subsidized by the FCIC and regulated by the USDA.
C. The government makes insurers make MPCI available to any farmer, but crop-hail
insurers can be selective about who they insure.
D. Coverage is for a percentage of the actual production history (APH) of the farm. -
ANSWER A. MPCI is a form of crop-revenue insurance.
Robert's tomato crop production was well below the revenue guarantee this year, and
Robert files a claim against his Crop-Revenue policy for the low yield. However, the
adjuster denies Robert's claim after completing her inspection. What might be a reason
for the denial? - ANSWER Failure to use the required amount of fertilizer
In order to set a yield guarantee for Maren's policy, Maren's agent will need a record of
the last four years of her crop yields. This record is called: - ANSWER an Actual
Production History.
