Personal lines insurance Exam Questions And Answers 100% Pass
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Course
Personal Lines
Institution
Personal Lines
Personal lines insurance Exam Questions
And Answers 100% Pass
Risk _________ is when one takes action to prevent or reduce potential loss. - answerReduction
When the number of similar units increases, the predictability of the loss improves according to the rule
of _____ ________. - answerLarge...
Personal lines insurance Exam Questions
And Answers 100% Pass
Risk _________ is when one takes action to prevent or reduce potential loss. - answer✔Reduction
When the number of similar units increases, the predictability of the loss improves according to the rule
of _____ ________. - answer✔Large Numbers
The insuring of risks that are more prone to losses than average risks is known as? - answer✔Adverse
Selection
A ___________ contract is an arrangement where one insurer transfers or shares risks with another
insurer. - answer✔Reinsurance
_____________ Reinsurance is accepted or rejected by a case by case basis. - answer✔Facultative
The fact that an insured would profit from a loss, would be a violation of the principle of ___________. -
answer✔Indemnity
The determination of acceptable risks is the primary function of the ___________ . -
answer✔Underwriter
Underwriters like to select insureds who's actual losses will be similar to expected losses. True or False?
- answer✔True
When rates cannot be used until they are improved by the department or division of insurance, they are
called ____ ________ rates. - answer✔Prior Approval
The termination of a policy by either the insured or insurer before its expiration date is known as
___________. - answer✔Cancellation
When the insurer cancels a property policy, the unearned premium is returned ___ ____. - answer✔Pro
Rata
When an insured requests cancellation of a policy, the unearned premium is refunded to the insured on
a _____ _____. - answer✔Short Rate
A fire is considered to be a _____ of a potential loss. - answer✔Cause
A document that provides temporary insurance coverage until a policy is issued is known as a ______. -
answer✔Binder
The process by which a disputed claim is decided by a neutral third party is known as ___________. -
answer✔Arbitration
_________ _________ is a situation where there are two causes resulting in a loss, with one of the
causes excluded and the other cause of loss not excluded. - answer✔Concurrent Causation
If two or more policies provide identical coverage for the same risk, the policies are deemed to be
__________. - answer✔Concurrent
Policy A is written for $100,000, and an excess Policy B is written for $200,000 on the same property. In
the event of a $20,000 loss, how much will each policy pay? - answer✔A= $20,000 ; B= $0
A building that has neither occupants nor personal property is ______. - answer✔Vacant
When property is damaged by fire, the loss is said to be a(n) ______ loss. - answer✔Direct
If a fire on a premises caused a power outage, which caused meat in the freezer to spoil, would the
meat spoilage be considered a direct loss or indirect loss? - answer✔Indirect Loss
Open peril policies include losses caused by theft. True or False? - answer✔True
If a property owner does not desire any deduction for depreciation following a covered loss, he/she
should purchase a ___________ ____ policy. - answer✔Replacement Cost
For replacement cost coverage to apply in dwelling policies, the insured must carry insurance at least
equal to ____% of the cost of replacement of the building. - answer✔80
Would a stated amount method of valuation likely be used when insuring gold bullion? - answer✔No
An ____ policy is one that the value of the subject matter is not agreed upon, but is left to be
ascertained in case of loss. - answer✔Open
A valued policy is one that expresses on it's face an agreement that the thing insured is valued at a
specific sum. True or False? - answer✔True
Insuring more than one property on one policy for a single amount of insurance that applies to all
properties covered under the policy is known as _______ coverage. - answer✔Blanket
The name of the insured is found on the declarations page of the policy. True or False? - answer✔True
What part or portion of a property policy contains the effective or expiration dates of the policy? -
answer✔Declarations
Are the insurer's limits of insurance amount stated in the conditions part or portion part of the policy? -
answer✔No
The __________ part or portion of a property policy sets forth the rights, rules, duties, and obligations
of the insurer and insured to be followed throughout the policy period. - answer✔Conditions
The ______________ Clause allows insurers to automatically broaden coverage without endorsement
on existing policies with no increase in premium. - answer✔Liberalization
When a property policy has been in effect less than 60 days and the insurer cancels for the nonpayment
of premium, the insurer must give the insured ____ days written notice. - answer✔10
Could an order to vacate the property possibly cause an insurer to cancel a commercial property policy?
- answer✔Yes
An insurer may nonrenew a homeowners policy with oral notice to the insured. True or False? -
answer✔False
The insured's transfer of right of ownership or interest in an insurance policy to another party with the
insurer's written consent is known as an __________. - answer✔Assignment
___________ transfers an insured's legal right of recovery to the insurer that paid the claim. -
answer✔Subrogation
When an insured suffers a loss, they are required to prepare an inventory of the damaged property at
the ________ request. - answer✔Insurers
In the event of a loss under a homeowners policy, a proof of loss must be signed and sworn by the
_______. - answer✔Insured
Company A has issued a policy in the amount of $200,000, and company B has issued a policy in the
amount of $300,000. under the other insurance or pro rata liability condition or provision, how much
will company A pay of a $100,000 loss? - answer✔$40,000
The _________ portion of the policy specifies the causes of loss perils not covered, or property not
covered. - answer✔Exclusions
An amendment that is attached to a property insurance policy to broaden or restrict coverage, or
further define certain policy provisions is known as a(n) ___________. - answer✔Endorsement
Under a commercial lines property policy, who is responsible for making the premium payments in a
timely manner? - answer✔First Named Insured
Under a commercial lines property policy, who has the right to request changes to the policy, and the
right to recieve any return of premium? - answer✔First Named Insured
Essentially, the higher the deductible that the insured chooses, the higher the premium will be. True or
False? - answer✔False
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