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PERSONAL LINES FINAL EXAM QUE STIONS
WITH 100% CORRECT ANSWER S.
Question 1: What part of the policy lists the rules, duties, and
obligations of the insured and insurer?
- Declarations Page
- Insuring Agreement
- conditions
- exclusions
CORRECT ANSWER : C) Conditions
Question 2: The directive that states the violation committed and
requires an agent to stop the illegal acitivity is called:
- show cause order
- subpoena
- tort
- cease and desist order
CORRECT ANSWER : D) cease and desist order
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Question 3: Extended Coverage (EC) include all of the
following perils, EXCEPT:
- wind
- riot
- smoke
- vandalism
CORRECT ANSWER : D) vandalism
Question 4: A device which is used to minimize small nuisance
claims, lower insurance premiums, and reduce morale hazards is
called:
- arbitration
- deductible
- valued policy
- coinsurance
CORRECT ANSWER : Deductible
Question 5: All of the following perils are covered, in a
PERSONAL ARTICLES FLOATER (PAF), EXCEPT:
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- inherent vice
- flood
- Earthquake
- theft
CORRECT ANSWER : A) Inherent vice
Question 6: The policyholder has a liability of $300,000 and
caused an accident injuring one person in the amount of $250,000 and another person in the amount of $150,000. What limit of coverage applies to the loss?
A) $150,000
B) $300,000
C) $250,000
D) $400,000
CORRECT ANSWER : B) $300,000
Question 7: Eligible vehicles are described in the Personal Auto
Policy. Which of the following vehicles is NOT eligible?
- A newly acquired sedan
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- an owned SUV
- A van used as a temporary substitute
- a truck used to make deliveries
CORRECT ANSWER : D) a truck used to make deliveries
Question 8: What is the deductible in an UNINSURED
MOTORIST CLAIM?
A) $100
B) $200
C) $250
D) $500
CORRECT ANSWER : B) $200
Question 9: In order for an insurer to meet their obligation to an
insured, "insurable interest" must exist:
- At the time the loss occurs
- At the time the application is made for the insurance
- At the time of application or at the time of loss
