Alabama Insurance Property and Casualty Test Questions.pdf file:///C:/Users/HP/Desktop/TYPA%20NEW/Alabama%20Insurance
Alabama Insurance Property and Casualty Test
Questions
1. An incorporated insurance company which is run by a board of directors isknown as
ANS a capital-stock company
2. Which of the following statements is true regarding a binder?
a. a binder guarantees that a policy will be issued by the insurance company.
b. a binder guarantees coverage and that a policy will be issued
c. a binder does not guarantee that a policy will be issued; it only guaranteestemporary
coverage.
d. a binder does not afford any coverage, it is merely a snapshot of thecoverage in
effect at the time it is issued.
ANS c
3. Liability imposed by law when someone is involved in an inherently danger-ous activity
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,Alabama Insurance Property and Casualty Test Questions.pdf file:///C:/Users/HP/Desktop/TYPA%20NEW/Alabama%20Insurance
or condition is known as
ANS absolute liability
4. Which of the following elements of a contract does the premium represent?
a. offer and acceptance
b. competent parties
c. valid consideration
d. legal purpose
ANS c
5. Contracts written for a specified amount as agreed to by both the insuredand insurer
at policy inception are known as
ANS valued or stated value contracts
6. All of the following must be present to establish negligence except
a. duty owed and breach of that duty
b. a proximate cause of loss
c. damages must exist
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