Alabama Property and Casualty Exam 2026 Questions and Answers

Alabama Property and Casualty Exam
2026 Questions and Answers

If a company cancels an auto policy mid term, the refund will be made on




a. pro rata basis

b. short rate basis

c. retroactive basis

d. coinsurance basis - Correct answer-Pro Rata Basis

What is the term used to describe terminating the insurance relationship at the end

of the policy period ?

a. cancellation

b. nonrenewal

c. separation

d. exclusion - Correct answer-Nonrenewal

©COPYRIGHT 2025, ALL RIGHTS RESERVED 1

,Which is the best example of an indirect loss ?




a. sequential loss

b. liability loss

c. employee theft

d. loss of use - Correct answer-Loss of Use

Which is a two party contract?




A. property

B. casualty

C. liability

D. auto - Correct answer-Property

Insurance Contracts offset

a. speculative risk

b. pure risk



©COPYRIGHT 2025, ALL RIGHTS RESERVED 2

, c. gambling

d. created risk - Correct answer-Pure Risk

Which of the following is a third party contract ?

a. property

b. casualty

c. earthquake

d. theft - Correct answer-Casualty

Risk is best defined as

a. chance of loss

b. certainty of loss

c. financially loss

d. sentimental loss - Correct answer-Chance of loss

Being subject to a loss is

a. liability

b. indemnity



©COPYRIGHT 2025, ALL RIGHTS RESERVED 3