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PERSONAL LINES QUESTIONS AND ANSWERS
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PERSONAL LINES QUESTIONS AND ANSWERS
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PERSONAL LINES QUESTIONS AND ANSWERSWhich of the following is true about cancellations of an insurance policy
A- By the insurance company at any time
B- By the insurance company after it gives the insured 5 days notice
C- By the insured at any time after giving advance written notice to the company
D- By the insured after they give the insurance company at least 10 days written notice -
Answers-C- By the insured at any time after giving advance written notice to the
company
Which of the following individuals represents the insurance company when selling an
insurance policy?
A- Adjuster
B- Broker
C- Producer
D- Insurer - Answers-C- Producer
A temporary insurance contract pending the issuance of a policy is called:
A- Endorsement
B- Certificate of Insurance
C- Binder
D- None of the Above - Answers-C- Binder
Which of the following types of authority does the public assume an agent has when
quoting insurance?
A- Implied
B- Authorized
C- Express
D- Apparent - Answers-D- Apparent (quoting would be an action in this situation)
Sprinklers in a building are an example of which type of risk management?
A- Avoidance
B- Reduction
C- Transfer
D- Retention - Answers-B- Reduction
A producer has each of the following responsibilities to the insurer, except:
A- A fiduciary duty (trust)
B- Forwarding premiums to the insured on a timely basis
C- Reporting material facts that may affect underwriting
D- A duty to recommend only high rate policies - Answers-D- A duty to recommend only
high rate policies
To collect under a policy of indemnity insurance, the insured must have insurable
interest. When must this interest be present?
A- At the time of application
,B- At the time the loss occurs
C- When the policy is issued
D- Throughout the policy period - Answers-B- At the time the loss occurs
A federal regulation called the _____________________ protects consumer privacy.
A- Fraudulent Insurance Act
B- Privacy Protection Act
C- Fair Credit Reporting Act
D- None of the above - Answers-C- Fair Credit Reporting Act
A warranty is defined as which of the following?
A- What a reasonable and prudent buyer can expect
B- Intentional misrepresentation on the application
C- Statement in the application that is guaranteed to be true
D- A false statement in the application - Answers-C- Statement in the application that is
guaranteed to be true
The part of the insurance contract that describes who is insured, besides the named
insured is the:
A- Conditions
B- Declarations
C- Insurance Contract
D- Definitions - Answers-D- Definitions
During an inspection of an insured's home, the insurance company discovers the
chimney is not properly attached to the house. This would be referred to as a:
A- Morale Hazard
B- Proximate Hazard
C- Physical Hazard
D- Moral Hazard - Answers-C- Physical Hazard
A court would consider which of the following when determining a person's negligence:
A- How serious the injury
B- How a prudent person would have acted in the same situation
C- The amount of insurance the person has
D- How many times they have been sued in the past - Answers-B- How a prudent
person would have acted in the same situation
What is the purpose of the Fair Credit Reporting Act?
A- To Protect the consumer's right to privacy
B- To encourage lending
C- To protect the insurer's right to privacy
D- To protect an insurance company's credit rating - Answers-A- To Protect the
consumer's right to privacy
,Fred decides ti protect his home with a home security system. If a fire or break in occurs
when he is not home, the security company will respond. This is an example of:
A- Risk sharing
B- Risk avoidance
C- Risk reduction
D- Risk transfer - Answers-C- Risk reduction
A broker's license is a requirement for an Agent who:
A- Shares in a sale with another Agent
B- Places an insurance policy with a different insurance company other than the ones
they are under contract with
C- Is an employee of the insurance company
D- Is an employee of the insured - Answers-B- Places an insurance policy with a
different insurance company other than the ones they are under contract with
An insurance brokers license gives the licensee authority to transact every kind of
insurance, except:
A- Workers' Compensation
B- Life insurance and annuities
C- Disability Insurance
D- Auto Insurance - Answers-B- Life insurance and annuities
Which term refers to insurance companies that are incorporated under the laws of
another state?
A- Excess
B- Domestic
C- Foreign
D- Alien - Answers-C- Foreign
An insurer with a certificate of authority doing business in the state of New York is
considered:
A- Permitted
B- Excess
C- Foreign
D- Admitted - Answers-D- Admitted
______________________ equals that portion of the damages awarded specifically for
tangible (out of pocket) losses or damages.
A- Special damages
B- Specific damages
C- Compensatory damages
D- General damages - Answers-A- Special damages
When answering questions on an application for insurance, an applicant must answer in
accordance with the legal principle of:
A- Utmost good faith
, B- Waiver
C- Estoppel
D- Reasonable expectations - Answers-A- Utmost good faith
The Fair Credit Reporting Act does which of the following:
A- It makes the disclosure of the information illegal
B- It prevents insurance companies from using information that is disputed by the
applicant
C- It requires the insurance company to notify an applicant, in advance, that an
inspection report may be obtained.
D- It requires the insurance companies to send all applicants copies of any reports
obtained form an inspection company. - Answers-C- It requires the insurance company
to notify an applicant, in advance, that an inspection report may be obtained.
The promise by the insurance company to pay the insured for covered losses is stated
in which of the following sections of a policy?
A- Insuring Agreements
B- Conditions
C- Declarations
D- Exclusions - Answers-A- Insuring Agreements
A deductible is used for which of the following reasons?
A- To decrease the Moral hazard by requiring the insured to pay a part of each loss
B- To reduce the insurance company claims expense
C- Reduce the cost of insurance by eliminating small claims
D- All of the above - Answers-D- All of the above
Dishonest tendencies that increase the probability of loss are what type of hazard?
A- Physical
B- Legal
C- Emotional
D- Moral - Answers-D- Moral
An agent's overall authority stems from three separate sources. One authority is created
when the insurance company supplies business cards, letterhead and signs. Which type
of authority is this?
A- Implied Authority
B- Apparent Authority
C- Fiduciary Authority
D- Express Authority - Answers-D- Express Authority (from the company represented)
Which example of insurance restores the insured to the same economic condition that
existed before the loss?
A- Adhesion
B- Underwriting
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