Alaska Property & Casualty Insurance Practice Exam Free - 2026

• A. At any time during the term, with 30 days' notice
• B. Only at the anniversary, with 20 days' notice
• C. Only at the anniversary, with 60 days' notice
• D. Only on the policy's annual anniversary, with written notice mailed at least 45 days before the expiration date

Correct answer: D. Only on the policy's annual anniversary, with written notice mailed at least 45 days before the expiration date

Explanation: An Alaska insurer may fail to renew a personal insurance policy only on the policy's annual anniversary, and only if written notice of nonrenewal is mailed to the named insured at least 45 days before the expiration or anniversary date; if proper notice is not given, the policy continues until notice for the required period is provided. A is wrong because nonrenewal is limited to the anniversary and 30 days is a cancellation period. B uses the nonpayment cancellation period. C uses the commercial cancellation period. See AS 21.36.240.

• A. Notice must be mailed to Margaret and to her designated daughter at least 30 days before cancellation, and the insurer must annually tell insureds 70 or older of the designee right
• B. Notice to Margaret alone is sufficient; designees have no legal standing
• C. Notice must go to the daughter only, because she is the designee
• D. Notice must be mailed at least 60 days before cancellation because the insured is over 70

Correct answer: A. Notice must be mailed to Margaret and to her designated daughter at least 30 days before cancellation, and the insurer must annually tell insureds 70 or older of the designee right

Explanation: For a named insured 70 years of age or older, Alaska requires the cancellation notice to be mailed to the named insured and, if the insured has made a written request, to the insured's designee at least 30 days before the effective date (20 days for nonpayment, 10 days for crime, fraud or license grounds); an insurer writing personal insurance for a person 70 or older must annually give written notice of the right to name a designee. B ignores the designee rule. C is wrong because the named insured must still receive notice. D is wrong because the age rule changes who receives notice, not the number of days. See AS 21.36.220.

• A. 10 percent of the unearned premium, refunded within 30 days
• B. 7.5 percent of the unearned premium, refunded within 45 days of the request or the effective date, whichever is later
• C. A flat $50 fee, refunded within 60 days
• D. No fee may be charged, and the refund is due within 15 days

Correct answer: B. 7.5 percent of the unearned premium, refunded within 45 days of the request or the effective date, whichever is later

Explanation: When a policy is cancelled by the insured, the insurer must return or credit the unearned premium less a cancellation fee not to exceed 7.5 percent of the unearned premium, and only if the fee is clearly stated in the policy; the refund must be made within 45 days of receipt of the cancellation request or the effective date of cancellation, whichever is later (45 days after completion if the policy is audited). A, C and D use figures that do not appear in the statute, and D is wrong because a stated fee is permitted. See AS 21.36.255.

• A. Acknowledge within 30 calendar days; accept or deny within 60 calendar days
• B. Acknowledge within 5 working days; accept or deny within 10 working days
• C. Acknowledge within 10 working days of notification; accept or deny within 15 working days after receipt of the proof of loss, and pay undisputed amounts within 30 working days
• D. Acknowledge within 15 calendar days; accept or deny within 45 calendar days

Correct answer: C. Acknowledge within 10 working days of notification; accept or deny within 15 working days after receipt of the proof of loss, and pay undisputed amounts within 30 working days

Explanation: Alaska's claim settlement standards require written acknowledgement of a first-party claim within 10 working days after notification, a reply to other communications within 15 working days, written acceptance or denial within 15 working days after receipt of a properly executed proof of loss (with written reasons if more time is needed, and status letters every 45 working days), and payment of undisputed portions within 30 working days. A and D use calendar-day periods the regulations do not use. B understates both periods. See 3 AAC 26.070.

• A. Coverage for your own injuries regardless of who was at fault
• B. Coverage for injuries to your employees while on the job
• C. Coverage for legal liability when you injure someone else
• D. Coverage for damage you cause to another person's property

Correct answer: C. Coverage for legal liability when you injure someone else

Explanation: Bodily injury liability coverage protects the insured when legally responsible for injuring another person. It pays for medical expenses, lost wages, pain and suffering, and legal defense costs.

• A. Coverage for damage to your own vehicle when you collide with another object
• B. Coverage for damage to your property caused by another person
• C. Coverage for injuries you cause to other people in an accident
• D. Coverage for legal liability when you damage someone else's property

Correct answer: D. Coverage for legal liability when you damage someone else's property

Explanation: Property damage liability coverage protects the insured when legally responsible for damaging another person's property, such as their vehicle, home, or belongings.

• A. Coverage protecting against claims of bodily injury or property damage caused by the insured
• B. Coverage paying the insured's own medical bills after an injury on the residence premises
• C. Coverage paying for the insured's personal property both on and away from the premises
• D. Coverage protecting the insured against liability claims arising from business conducted at the home

Correct answer: A. Coverage protecting against claims of bodily injury or property damage caused by the insured

Explanation: Personal liability coverage in a homeowners policy protects the insured against claims alleging they caused bodily injury or property damage to others, covering legal defense costs and damages up to policy limits.

• A. Primary liability coverage that replaces auto and homeowners policies
• B. Excess liability coverage above underlying primary policies
• C. A package policy that combines property and liability coverage
• D. Excess property coverage above the limits of a homeowners policy

Correct answer: B. Excess liability coverage above underlying primary policies

Explanation: An umbrella policy provides excess liability coverage above the limits of underlying primary policies (auto, homeowners). It also may cover claims excluded by underlying policies.

• A. Deliberate conduct intended to cause harm to another person
• B. Failure to disclose a known material fact on an insurance application
• C. Failure to exercise reasonable care, resulting in harm to others
• D. Failure to comply with the conditions of an insurance contract

Correct answer: C. Failure to exercise reasonable care, resulting in harm to others

Explanation: Negligence is the failure to exercise the degree of care that a reasonable person would exercise under similar circumstances, resulting in harm or damage to another person or property.

• A. Offer, acceptance, consideration, and legality
• B. Intent, motive, opportunity, and resulting injury
• C. Duty, breach of duty, foreseeability, and intent
• D. Duty, breach of duty, proximate cause, and damages

Correct answer: D. Duty, breach of duty, proximate cause, and damages

Explanation: To prove negligence, a plaintiff must establish four elements: (1) the defendant had a duty of care, (2) the defendant breached that duty, (3) the breach was the proximate cause of injury, and (4) actual damages resulted.

• A. Claims from others you injure or whose property you damage
• B. Damage to your own vehicle from a collision with another car
• C. Your own medical expenses after an accident regardless of fault
• D. Your injuries caused by a driver who carries no insurance

Correct answer: A. Claims from others you injure or whose property you damage

Explanation: Auto liability coverage protects you financially when you're legally responsible for injuring others or damaging their property in an accident. It pays their medical bills, property damage, and legal defense costs.

• A. Coverage for damage to another driver's vehicle when you are legally at fault
• B. Coverage for damage to your vehicle from colliding with another object
• C. Coverage for damage to your vehicle from theft, fire, or hail
• D. Coverage for injuries to occupants of your vehicle in a collision

Correct answer: B. Coverage for damage to your vehicle from colliding with another object

Explanation: Collision coverage pays for damage to your own vehicle when it collides with another vehicle or object (like a tree or guardrail), regardless of who is at fault.