Personal Lines Insurance License Exam Flashcards
Browse all 15 cards
What is the exam fee?
$39.
On average, how much time do you have per question?
About 1.2 minutes (120 minutes ÷ 100 questions) — pace yourself to avoid running out of time.
What is the time limit for the exam?
120 minutes.
How many scoreable questions are on the Personal Lines / General Property exam?
100 scoreable questions.
Insurance term: Indemnity
The principle that an insured is restored to their pre-loss financial condition — made whole, but not allowed to profit from a loss.
What is 'insurable interest' and when must it exist for property insurance?
A financial stake in the property such that its loss causes the insured harm; for property insurance it must exist at the time of loss.
Actual Cash Value (ACV) vs. Replacement Cost
ACV = replacement cost minus depreciation; Replacement Cost pays to repair/replace with like kind and quality without deducting depreciation.
What does a deductible do?
The amount the insured pays out of pocket before the insurer pays; higher deductibles generally lower the premium.
Named perils vs. open (all-risk) peril coverage
Named perils covers only perils specifically listed in the policy; open-peril covers all causes of loss except those excluded.
What is subrogation?
After paying a claim, the insurer acquires the insured's right to recover the loss from the responsible third party.
What is the coinsurance clause in property insurance?
It requires the insured to carry coverage equal to a set percentage (often 80%) of value; underinsuring triggers a penalty that reduces the claim payment.
In an HO (homeowners) policy, what does Coverage A insure?
The dwelling — the main house structure and attached structures.
What is liability (Coverage E) in a homeowners policy?
Personal liability coverage for bodily injury or property damage to others for which the insured is legally responsible.
What is the difference between a peril and a hazard?
A peril is the cause of loss (e.g., fire); a hazard is a condition that increases the chance or severity of a loss.
What is the purpose of the 'binder' in insurance?
A temporary agreement providing immediate coverage until the formal policy is issued.