personal lines insurance
Risk _________ is when one takes action to prevent or reduce potential loss. -
CORRECT ANSWER-Reduction
When the number of similar units increases, the predictability of the loss improves
according to the rule of _____ ________. - CORRECT ANSWER-Large Numbers
The insuring of risks that are more prone to losses than average risks is known as? -
CORRECT ANSWER-Adverse Selection
A ___________ contract is an arrangement where one insurer transfers or shares risks
with another insurer. - CORRECT ANSWER-Reinsurance
_____________ Reinsurance is accepted or rejected by a case by case basis. -
CORRECT ANSWER-Facultative
The fact that an insured would profit from a loss, would be a violation of the principle of
___________. - CORRECT ANSWER-Indemnity
The determination of acceptable risks is the primary function of the ___________ . -
CORRECT ANSWER-Underwriter
Underwriters like to select insureds who's actual losses will be similar to expected
losses. True or False? - CORRECT ANSWER-True
When rates cannot be used until they are improved by the department or division of
insurance, they are called ____ ________ rates. - CORRECT ANSWER-Prior Approval
,The termination of a policy by either the insured or insurer before its expiration date is
known as ___________. - CORRECT ANSWER-Cancellation
When the insurer cancels a property policy, the unearned premium is returned ___
____. - CORRECT ANSWER-Pro Rata
When an insured requests cancellation of a policy, the unearned premium is refunded to
the insured on a _____ _____. - CORRECT ANSWER-Short Rate
A fire is considered to be a _____ of a potential loss. - CORRECT ANSWER-Cause
A document that provides temporary insurance coverage until a policy is issued is
known as a ______. - CORRECT ANSWER-Binder
The process by which a disputed claim is decided by a neutral third party is known as
___________. - CORRECT ANSWER-Arbitration
_________ _________ 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. - CORRECT
ANSWER-Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are
deemed to be __________. - CORRECT ANSWER-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? -
CORRECT ANSWER-A= $20,000 ; B= $0
A building that has neither occupants nor personal property is ______. - CORRECT
ANSWER-Vacant
When property is damaged by fire, the loss is said to be a(n) ______ loss. - CORRECT
ANSWER-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? - CORRECT
ANSWER-Indirect Loss
Open peril policies include losses caused by theft. True or False? - CORRECT
ANSWER-True
If a property owner does not desire any deduction for depreciation following a covered
loss, he/she should purchase a ___________ ____ policy. - CORRECT ANSWER-
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. -
CORRECT ANSWER-80
Would a stated amount method of valuation likely be used when insuring gold bullion? -
CORRECT ANSWER-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. - CORRECT ANSWER-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? - CORRECT ANSWER-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. -
CORRECT ANSWER-Blanket
The name of the insured is found on the declarations page of the policy. True or False?
- CORRECT ANSWER-True
What part or portion of a property policy contains the effective or expiration dates of the
policy? - CORRECT ANSWER-Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part
of the policy? - CORRECT ANSWER-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. -
CORRECT ANSWER-Conditions
The ______________ Clause allows insurers to automatically broaden coverage
without endorsement on existing policies with no increase in premium. - CORRECT
ANSWER-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.
- CORRECT ANSWER-10
Could an order to vacate the property possibly cause an insurer to cancel a commercial
property policy? - CORRECT ANSWER-Yes
An insurer may nonrenew a homeowners policy with oral notice to the insured. True or
False? - CORRECT ANSWER-False
Risk _________ is when one takes action to prevent or reduce potential loss. -
CORRECT ANSWER-Reduction
When the number of similar units increases, the predictability of the loss improves
according to the rule of _____ ________. - CORRECT ANSWER-Large Numbers
The insuring of risks that are more prone to losses than average risks is known as? -
CORRECT ANSWER-Adverse Selection
A ___________ contract is an arrangement where one insurer transfers or shares risks
with another insurer. - CORRECT ANSWER-Reinsurance
_____________ Reinsurance is accepted or rejected by a case by case basis. -
CORRECT ANSWER-Facultative
The fact that an insured would profit from a loss, would be a violation of the principle of
___________. - CORRECT ANSWER-Indemnity
The determination of acceptable risks is the primary function of the ___________ . -
CORRECT ANSWER-Underwriter
Underwriters like to select insureds who's actual losses will be similar to expected
losses. True or False? - CORRECT ANSWER-True
When rates cannot be used until they are improved by the department or division of
insurance, they are called ____ ________ rates. - CORRECT ANSWER-Prior Approval
,The termination of a policy by either the insured or insurer before its expiration date is
known as ___________. - CORRECT ANSWER-Cancellation
When the insurer cancels a property policy, the unearned premium is returned ___
____. - CORRECT ANSWER-Pro Rata
When an insured requests cancellation of a policy, the unearned premium is refunded to
the insured on a _____ _____. - CORRECT ANSWER-Short Rate
A fire is considered to be a _____ of a potential loss. - CORRECT ANSWER-Cause
A document that provides temporary insurance coverage until a policy is issued is
known as a ______. - CORRECT ANSWER-Binder
The process by which a disputed claim is decided by a neutral third party is known as
___________. - CORRECT ANSWER-Arbitration
_________ _________ 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. - CORRECT
ANSWER-Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are
deemed to be __________. - CORRECT ANSWER-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? -
CORRECT ANSWER-A= $20,000 ; B= $0
A building that has neither occupants nor personal property is ______. - CORRECT
ANSWER-Vacant
When property is damaged by fire, the loss is said to be a(n) ______ loss. - CORRECT
ANSWER-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? - CORRECT
ANSWER-Indirect Loss
Open peril policies include losses caused by theft. True or False? - CORRECT
ANSWER-True
If a property owner does not desire any deduction for depreciation following a covered
loss, he/she should purchase a ___________ ____ policy. - CORRECT ANSWER-
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. -
CORRECT ANSWER-80
Would a stated amount method of valuation likely be used when insuring gold bullion? -
CORRECT ANSWER-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. - CORRECT ANSWER-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? - CORRECT ANSWER-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. -
CORRECT ANSWER-Blanket
The name of the insured is found on the declarations page of the policy. True or False?
- CORRECT ANSWER-True
What part or portion of a property policy contains the effective or expiration dates of the
policy? - CORRECT ANSWER-Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part
of the policy? - CORRECT ANSWER-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. -
CORRECT ANSWER-Conditions
The ______________ Clause allows insurers to automatically broaden coverage
without endorsement on existing policies with no increase in premium. - CORRECT
ANSWER-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.
- CORRECT ANSWER-10
Could an order to vacate the property possibly cause an insurer to cancel a commercial
property policy? - CORRECT ANSWER-Yes
An insurer may nonrenew a homeowners policy with oral notice to the insured. True or
False? - CORRECT ANSWER-False
