Personal Lines Questions And Answers
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Which 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 notic...
Which 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 - answer✔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 - answer✔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 - answer✔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 - answer✔D- Apparent (quoting would be an action in this situation)
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 - answer✔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 - answer✔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 - answer✔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
C- Indemnity
D- Insurability - answer✔C- Indemnity
The conditions section of an insurance contract specifies which of the following:
A- The insured's responsibilities
B- The location of the property
C- The amount of coverage
D- The policy period - answer✔A- The insured's responsibilities
Each of the following is an element of a legal contract, except:
A- Consideration
B- Indemnity
C- Legal Purpose
D- Agreement - answer✔B- Indemnity
A producer who can represent one, or more than one insurance company, and who also represents
members of the insurance buying public is classified as:
A- Broker
B- Independent Agent
C- Solicitor
D- Both A and B - answer✔D- Both A and B
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 - answer✔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 - answer✔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 - answer✔C- Physical Hazard
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