CHAPTER 1 Alabama P&C, WC, & Crop Adjuster Pre-Licensing
Test Exam with questions and answers 100%Correctly verified
answers latest update 2026/2027 RATED A+
Insurance - CORRECT ANSWERS Financial tool that protects individuals and organizations from
unforeseen and extraordinary financial losses by transferring risk to another party
Principle of Indemnity - CORRECT ANSWERS Restoration to approximate previous financial condition;
no more no less
To prevent an insured from making a profit on a loss - CORRECT ANSWERS The purpose of the
principle of indemnity
The fee paid by the insured in exchange for an insurace policy - CORRECT ANSWERS Which of the
following best describes premium?
A pool of collected premiums that insurer sets aside to pay claims - CORRECT ANSWERS What is a
reserve in terms of insurance?
Repairs to property
Reimbursement for additional living expenses
Rental cars, hotels
Costs directly associated with a loss, as allowed under the policy - CORRECT ANSWERS
Indemnification may include payment for :
Agreement
Consideration
Competent Parties
Legal Purpose - CORRECT ANSWERS 4 Qualifications of a contract:
Personal
Adhesion
Utmost good faith
Aleatory
, CHAPTER 1 Alabama P&C, WC, & Crop Adjuster Pre-Licensing
Test Exam with questions and answers 100%Correctly verified
answers latest update 2026/2027 RATED A+
Unilateral
Condition - CORRECT ANSWERS 6 Characteristics of Insurance Contracts
Personal Contract - CORRECT ANSWERS What characteristic contract protects the policyholder from
financial losses, covers the person not the property,
Contract of Adhesion - CORRECT ANSWERS The insurer is responsible for the wording of the contract
The insured has no say in the meaning
Courts favor the insured in the event of ambiguity
Contract of Utmost good faith - CORRECT ANSWERS Applicants are expected to be completely
honest about the risk to the insurer
The insurer must reply on the applicants not to conceal or misinterpret pertinent facts
Aleatory - CORRECT ANSWERS depending on an unknown future event. Neither party can know
future losses
Declarations Page
Insuring Agreement
Conditions
Exclusions - CORRECT ANSWERS An insurance contract has 4 essential parts:
Declarations Page - CORRECT ANSWERS Makes contracts specific to the policy holder
It establishes: name of both parties, policy number, location and description, value of insured item, dates
of policy, amount of limit and coverage, deductible, premium
Insuring Agreement - CORRECT ANSWERS Summarizes :
what is covered,
which causes of loss are covered
Test Exam with questions and answers 100%Correctly verified
answers latest update 2026/2027 RATED A+
Insurance - CORRECT ANSWERS Financial tool that protects individuals and organizations from
unforeseen and extraordinary financial losses by transferring risk to another party
Principle of Indemnity - CORRECT ANSWERS Restoration to approximate previous financial condition;
no more no less
To prevent an insured from making a profit on a loss - CORRECT ANSWERS The purpose of the
principle of indemnity
The fee paid by the insured in exchange for an insurace policy - CORRECT ANSWERS Which of the
following best describes premium?
A pool of collected premiums that insurer sets aside to pay claims - CORRECT ANSWERS What is a
reserve in terms of insurance?
Repairs to property
Reimbursement for additional living expenses
Rental cars, hotels
Costs directly associated with a loss, as allowed under the policy - CORRECT ANSWERS
Indemnification may include payment for :
Agreement
Consideration
Competent Parties
Legal Purpose - CORRECT ANSWERS 4 Qualifications of a contract:
Personal
Adhesion
Utmost good faith
Aleatory
, CHAPTER 1 Alabama P&C, WC, & Crop Adjuster Pre-Licensing
Test Exam with questions and answers 100%Correctly verified
answers latest update 2026/2027 RATED A+
Unilateral
Condition - CORRECT ANSWERS 6 Characteristics of Insurance Contracts
Personal Contract - CORRECT ANSWERS What characteristic contract protects the policyholder from
financial losses, covers the person not the property,
Contract of Adhesion - CORRECT ANSWERS The insurer is responsible for the wording of the contract
The insured has no say in the meaning
Courts favor the insured in the event of ambiguity
Contract of Utmost good faith - CORRECT ANSWERS Applicants are expected to be completely
honest about the risk to the insurer
The insurer must reply on the applicants not to conceal or misinterpret pertinent facts
Aleatory - CORRECT ANSWERS depending on an unknown future event. Neither party can know
future losses
Declarations Page
Insuring Agreement
Conditions
Exclusions - CORRECT ANSWERS An insurance contract has 4 essential parts:
Declarations Page - CORRECT ANSWERS Makes contracts specific to the policy holder
It establishes: name of both parties, policy number, location and description, value of insured item, dates
of policy, amount of limit and coverage, deductible, premium
Insuring Agreement - CORRECT ANSWERS Summarizes :
what is covered,
which causes of loss are covered
