Alabama Property and Casualty Sample
100 questions with complete solutions
What is a hazard? - answer-an increase in the possibility that a loss might occur
c c c c c c c c c c c c c c
transfer risk from a person or business to an insurance company that agrees to to pay
c c c c c c c c c c c c c c c
cfor losses in exchange for a premium. - answer-insurance
c c c c c c c c
The type of insurance company in which the policyholder is considered an owner, with
c c c c c c c c c c c c c
the right to vote and share in the profits is a - answer-mutual company
c c c c c c c c c c c c c c
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the
c c c c c c c c c c c c c
final mortgage payment to FBN Mortgage Company. Jewel is considering selling her
c c c c c c c c c c c c
home to her niece, Cynthia. Who has an insurable interest in the home? - answer-Jewel
c c c c c c c c c c c c c c c
Canford
c
Risk of loss is a speculative risk - answer-Which one of the following is NOT an element
c c c c c c c c c c c c c c c c
of insurability?
c c
a. Loss must be calculable
c c c c
b. Risk of loss must represent a financial harship
c c c c c c c c
c. Cost of insurance must be affordable
c c c c c c
d. Risk of loss is a speculative risk
c c c c c c c
The principle that states that an insured should be restored to approximately the same
c c c c c c c c c c c c c
financial position after a loss as before is known as... - answer-indemnity
c c c c c c c c c c c c
Declarations - answer-What part of an insurance policy personalizes the policy as to who
c c c c c c c c c c c c c
and what are insured?
c c c c
An insurance policy is prepared by the insurance company, with little or no input from the
c c c c c c c c c c c c c c c
insured. This means that an insurance policy is a/an... - answer-adhesion contract
c c c c c c c c c c c c
An individual who owns and lives in a condominium can obtain broad coverage for
c c c c c c c c c c c c c
personal property in the condo under which Homeowners form? - answer-HO-6
c c c c c c c c c c c
What is the purpose of the Fair Credit Reporting Act? - answer-to give the consumer
c c c c c c c c c c c c c c
recourse if insurance is denied on the basis of a credit report.
c c c c c c c c c c c c
a fire that was caused by the insureds negligence burns a neighbors building, the owner
c c c c c c c c c c c c c c
of the building sues the insured. - answer-Which of the following is a liability loss?
c c c c c c c c c c c c c c c
, What rating method involves modifying the premium based on the insured's loss
c c c c c c c c c c c
experience over a specified period of time? - answer-Experience rating
c c c c c c c c c c
Most Flood insurance coverage is provided by - answer-a federal government program
c c c c c c c c c c c
Which of the following businesses could be eligible for a Business owners policy?
c c c c c c c c c c c c
a. Hometown Bank & Trust
c c c c
b. Rest Easy Motel
c c c
c. Family Fun Time Amusement Park
c c c c c
d. Joe's Bar and Grill - answer-Rest Easy Motel
c c c c c c c c
Pain and Suffering - answer-Which one of the following types of benefits is generally not
c c c c c c c c c c c c c c
provided by a state's workers compensation law?
c c c c c c c
foreign - answer-Which of the following describes an insurance company doing business
c c c c c c c c c c c
cin a state other than the one where it is incorporated?
c c c c c c c c c c
provide temporary protection for the insured between the time the application is made
c c c c c c c c c c c c
and the policy is issued or the binder expires - answer-The purpose of a binder is to
c c c c c c c c c c c c c c c c c
Agent Michelle is under contract with the XYZ Insurance Company to represent and sell
c c c c c c c c c c c c c
insurance only for XYZ. This is an example of what type of agency system? - answer-
c c c c c c c c c c c c c c c c
Exclusive/captive
What type of insurance policy insures against all risks of loss that are not specifically
c c c c c c c c c c c c c c
excluded by the policy? - answer-Open peril policy
c c c c c c c c
prior approval state - answer-In a particular state, an insurance company must file policy
c c c c c c c c c c c c c
forms and rates with the state insurance department and wait for official approval before
c c c c c c c c c c c c c c
using the new forms and rates. This is an example of a/an
c c c c c c c c c c c c
According to the Nationwide Definition, imports and exports are - answer-eligible for
c c c c c c c c c c c
Ocean Marine insurance
c c c
Which Surety bond guarantees that bills for labor and materials will be paid by the
c c c c c c c c c c c c c c
contractor as they are due? - answer-Payment bond
c c c c c c c c
What describes actual cash value? - answer-Replacement cost-depreciation
c c c c c c c
appraisal condition - answer-The condition that provides a means to settle the amount of
c c c c c c c c c c c c c
a loss when the insured and the insurance company cannot agree is the
c c c c c c c c c c c c c
An insured purchased new furniture for $6000. At the time of a fire los, it had
c c c c c c c c c c c c c c c
depreciated $2000. The same furniture will cost $7000 to replace. What is the actual
c c c c c c c c c c c c c c
cash value of the destroyed furniture? - answer-5000
c c c c c c c c
100 questions with complete solutions
What is a hazard? - answer-an increase in the possibility that a loss might occur
c c c c c c c c c c c c c c
transfer risk from a person or business to an insurance company that agrees to to pay
c c c c c c c c c c c c c c c
cfor losses in exchange for a premium. - answer-insurance
c c c c c c c c
The type of insurance company in which the policyholder is considered an owner, with
c c c c c c c c c c c c c
the right to vote and share in the profits is a - answer-mutual company
c c c c c c c c c c c c c c
Jewel Canford's home is insured by XYZ Insurance Company. Last year she made the
c c c c c c c c c c c c c
final mortgage payment to FBN Mortgage Company. Jewel is considering selling her
c c c c c c c c c c c c
home to her niece, Cynthia. Who has an insurable interest in the home? - answer-Jewel
c c c c c c c c c c c c c c c
Canford
c
Risk of loss is a speculative risk - answer-Which one of the following is NOT an element
c c c c c c c c c c c c c c c c
of insurability?
c c
a. Loss must be calculable
c c c c
b. Risk of loss must represent a financial harship
c c c c c c c c
c. Cost of insurance must be affordable
c c c c c c
d. Risk of loss is a speculative risk
c c c c c c c
The principle that states that an insured should be restored to approximately the same
c c c c c c c c c c c c c
financial position after a loss as before is known as... - answer-indemnity
c c c c c c c c c c c c
Declarations - answer-What part of an insurance policy personalizes the policy as to who
c c c c c c c c c c c c c
and what are insured?
c c c c
An insurance policy is prepared by the insurance company, with little or no input from the
c c c c c c c c c c c c c c c
insured. This means that an insurance policy is a/an... - answer-adhesion contract
c c c c c c c c c c c c
An individual who owns and lives in a condominium can obtain broad coverage for
c c c c c c c c c c c c c
personal property in the condo under which Homeowners form? - answer-HO-6
c c c c c c c c c c c
What is the purpose of the Fair Credit Reporting Act? - answer-to give the consumer
c c c c c c c c c c c c c c
recourse if insurance is denied on the basis of a credit report.
c c c c c c c c c c c c
a fire that was caused by the insureds negligence burns a neighbors building, the owner
c c c c c c c c c c c c c c
of the building sues the insured. - answer-Which of the following is a liability loss?
c c c c c c c c c c c c c c c
, What rating method involves modifying the premium based on the insured's loss
c c c c c c c c c c c
experience over a specified period of time? - answer-Experience rating
c c c c c c c c c c
Most Flood insurance coverage is provided by - answer-a federal government program
c c c c c c c c c c c
Which of the following businesses could be eligible for a Business owners policy?
c c c c c c c c c c c c
a. Hometown Bank & Trust
c c c c
b. Rest Easy Motel
c c c
c. Family Fun Time Amusement Park
c c c c c
d. Joe's Bar and Grill - answer-Rest Easy Motel
c c c c c c c c
Pain and Suffering - answer-Which one of the following types of benefits is generally not
c c c c c c c c c c c c c c
provided by a state's workers compensation law?
c c c c c c c
foreign - answer-Which of the following describes an insurance company doing business
c c c c c c c c c c c
cin a state other than the one where it is incorporated?
c c c c c c c c c c
provide temporary protection for the insured between the time the application is made
c c c c c c c c c c c c
and the policy is issued or the binder expires - answer-The purpose of a binder is to
c c c c c c c c c c c c c c c c c
Agent Michelle is under contract with the XYZ Insurance Company to represent and sell
c c c c c c c c c c c c c
insurance only for XYZ. This is an example of what type of agency system? - answer-
c c c c c c c c c c c c c c c c
Exclusive/captive
What type of insurance policy insures against all risks of loss that are not specifically
c c c c c c c c c c c c c c
excluded by the policy? - answer-Open peril policy
c c c c c c c c
prior approval state - answer-In a particular state, an insurance company must file policy
c c c c c c c c c c c c c
forms and rates with the state insurance department and wait for official approval before
c c c c c c c c c c c c c c
using the new forms and rates. This is an example of a/an
c c c c c c c c c c c c
According to the Nationwide Definition, imports and exports are - answer-eligible for
c c c c c c c c c c c
Ocean Marine insurance
c c c
Which Surety bond guarantees that bills for labor and materials will be paid by the
c c c c c c c c c c c c c c
contractor as they are due? - answer-Payment bond
c c c c c c c c
What describes actual cash value? - answer-Replacement cost-depreciation
c c c c c c c
appraisal condition - answer-The condition that provides a means to settle the amount of
c c c c c c c c c c c c c
a loss when the insured and the insurance company cannot agree is the
c c c c c c c c c c c c c
An insured purchased new furniture for $6000. At the time of a fire los, it had
c c c c c c c c c c c c c c c
depreciated $2000. The same furniture will cost $7000 to replace. What is the actual
c c c c c c c c c c c c c c
cash value of the destroyed furniture? - answer-5000
c c c c c c c c
