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Alaska Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Alaska Casualty course (Alaska Insurance Producer - Casualty - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. For liability insurance, insurable interest is established by:
An employment contract between the insured and the claimant, which is far too narrow to ground liability insurable interest under any standard ruleThe potential for legal liability arising out of one's actions, ownership, or relationshipsA blood relationship between the insured and the claimant, a familial test that has no application to commercial casualty insurable interest at allTitle or ownership of property, which is actually the test for first-party property insurable interest rather than the liability-side test
2. On which kind of policy is a consent to settle clause normal, and why?
Professional liability, as a settlement reads as an admissionWorkers compensation, because the benefits are set by statuteBusiness auto, because physical damage losses are easy to valueCommercial general liability, as bodily injury claims are large
3. An insured is stopped at a red light when a hit-and-run driver rear-ends her. She suffers $18,000 in medical bills and $6,000 in damage to her vehicle. Her PAP has Part A 30/60/25, Part B Medical Payments $5,000, Part C UM 30/60, and Part D collision with a $500 deductible. Which parts of her PAP respond to her medical bills?
Part B (Medical Payments) and Part C (Uninsured Motorists) — Part B pays first-dollar regardless of fault up to its limit, and Part C responds because the at-fault driver is uninsured.Part A, because she was injured in a covered auto — applicable to surplus-lines placements, which the scenario explicitly excludesPart B and Part D — Part B pays medicals and Part D pays for the vehicle damage including medical bills — under the older rule that was superseded by the post-2018 model amendmentsPart C only — UM is the exclusive coverage for injuries caused by an uninsured driver — only when the contract was issued before the regulatory amendment described above
4. Under AS 21.06.120, how often must the Director examine a domestic insurer?
At least once every seven yearsAt least once every three yearsOnly when a complaint is receivedAt least once every five years
5. Performance bonds, payment bonds, and bid bonds are all examples of:
Contract surety bonds used in constructionWorkers' compensation Part One self-insurance bondsAuto liability financial-responsibility surety filingsFidelity bonds protecting against employee dishonesty
6. The insured owns a 30-foot sailboat with a 25-horsepower auxiliary motor. Her umbrella requires underlying watercraft liability of $300,000 on boats over a certain size/power. If she does not carry a separate boat policy, which statement is MOST accurate?
The umbrella applies only if the required underlying watercraft liability is maintained; otherwise the umbrella does not respond to watercraft losses (or responds only over the required limit, not dropping into the gap).The HO policy's small watercraft coverage automatically satisfies any umbrella watercraft requirement — applicable to surplus-lines placements, which the scenario explicitly excludesWatercraft losses are always excluded by umbrellas regardless of underlying — under the older rule that was superseded by the post-2018 model amendmentsThe umbrella provides drop-down coverage for watercraft regardless of underlying — but only after the carrier exhausts the internal grievance process the question already presumes was completed
7. Two liability policies quote the same limit and the same premium, but one pays defence costs within the limit and the other in addition to it. What follows?
They are equivalent, because the stated limit of insurance is the sameThe one paying defence within the limit is broader, as defence is assuredThe one paying defence within the limit protects less, as defence erodes itThe difference matters only where a claim exceeds the policy limit
8. A producer licensed and in good standing in another state applies for an Alaska nonresident licence for the same lines. Under AS 21.27.270, what is generally required?
Completing Alaska prelicensing education before applyingPassing the Alaska examination for each line of authorityEstablishing a business office physically located in AlaskaApplication and fee, without sitting the Alaska examination
9. A general contractor is named as an additional insured on a subcontractor's policy and also has its own general liability policy. How does the contractor's OWN policy usually respond?
By equal shares alongside the subcontractor's own primary policyAs excess, because the form is excess over additional insured coverAs primary in every case, whatever the other policy providesIt does not respond at all while another policy is in force
10. A customer at a hardware store is struck on the head by a falling display sign and is treated at the ER. He sends the $1,800 bill to the store and signs no release. The store wants the bill paid without a lawsuit being filed. Which CGL coverage applies?
Coverage A — Bodily Injury, after a determination of legal liabilityCoverage B — Personal and Advertising InjuryCoverage D — Supplementary Payments onlyCoverage C — Medical Payments, paid without regard to fault up to the sub-limit
11. A material misrepresentation on a casualty insurance application generally permits the insurer to:
Rescind the policy from inception, subject to applicable state lawTake no action at all on the contract or any pending claim, ignoring the rescission and denial remedies that materiality actually triggers under state lawIncrease only the per-occurrence deductible on the next renewal cycle, a remedy that no standard form provides for a material application misstatementPay a portion of every pending claim under the policy in proportion to the materiality of the misstatement, an apportionment rule not adopted in any jurisdiction
12. Under the CGL's 'limits of insurance' section, which limit is the MOST the insurer will pay for ALL damages because of BI and PD included in the products-completed operations hazard during the policy year?
The products-completed operations aggregate limit.The each occurrence limit.The personal and advertising injury limit.The general aggregate limit.
13. A 'discovery' form in commercial crime covers:
Losses occurring only before the policy inception date and not during the policy period, an unusual narrowing that no standard ISO crime form actually adoptsLosses occurring only during a 90-day window after policy expiration, an unusual narrowing that no standard ISO commercial crime form actually adopts at allLosses regardless of when they occurred, as long as they are discovered during the policy periodLosses occurring during the policy period only, regardless of when they are actually discovered, which is the trigger of the loss-sustained form
14. A construction company owns two pieces of equipment: (1) a cherry-picker truck mounted on a licensed, road-registered chassis that drives between jobsites on public roads, and (2) a track-mounted bulldozer that is hauled to each jobsite on a trailer and never operates on public roads. The cherry-picker tips while parked on a public street and injures a pedestrian; the bulldozer tips on the jobsite and crushes a bystander. Which policies respond?
BAP responds to both — both pieces are powered vehicles used in the business — applicable to commercial scenarios only, not the personal-lines context — though only when the underlying contract contains an explicit waiver, which the scenario doesn't establishCGL responds to both — anything with an attached boom or treads is mobile equipment, under the broader consumer-protection construction sometimes applied here — required under a separate compliance provision that doesn't reach this fact patternThe CGL responds to the cherry-picker because of the attached boom, and the BAP responds to the bulldozer because it is self-propelled, per the safe-harbor exception that activates only for primary-state filingsBAP responds to the cherry-picker (it is a licensed road vehicle and therefore an auto); CGL responds to the bulldozer (it is mobile equipment because it travels on crawler treads and is not road-licensed).
15. What does Alaska Rule of Civil Procedure 82 do that most American jurisdictions do not?
It requires all civil disputes in the state to be arbitratedIt caps the punitive damages recoverable in liability suitsIt lets the prevailing party recover part of its fees from the loserIt shortens the limitation period for bringing insurance claims
16. What does an insurer's certificate of authority specify?
The producers appointed by the insurerThe rates the insurer must chargeThe kinds of insurance the insurer may transactThe territory within Alaska where it may write
17. A PAYMENT bond (also called a labor and materials bond) guarantees:
Payment of the contractor's payroll taxes — applicable to commercial scenarios only, not the personal-lines contextThe contractor will complete the project, consistent with the model regulation but inapplicable to this scenarioPayment of architect's fees — required under a separate compliance provision that doesn't reach this fact patternPayment to subcontractors, laborers, and material suppliers who perform work or supply materials on the project.
18. The coverage territory of a typical personal umbrella is BEST described as:
Worldwide (a genuine advantage over the underlying HO and PAP, which are more geographically limited).The United States and Canada only — only when the contract was issued before the regulatory amendment described aboveThe state where the declarations were issued — applies if the loss is partial; this question describes a constructive total lossAny country with a U.S. embassy, under the broader consumer-protection construction sometimes applied here
19. Under AS 21.27.030, what proportion of a licensee's aggregate compensation may come from controlled business?
Not more than fifty percentThere is no limit if it is disclosedNot more than seventy-five percentNot more than twenty percent
20. Uninsured Motorists (UM) coverage on a PAP responds when:
The insured is at fault for the accident, an exposure addressed by PAP Part A Liability rather than by Uninsured Motorists coverage at allThe insured's covered auto is damaged by hail or other weather perils, an exposure that PAP Part D other-than-collision (comprehensive) addressesThe insured is injured by a driver who has no liability insurance or is a hit-and-runThe insured is sued by a passenger in the covered auto over a bodily-injury claim, an exposure addressed by PAP Part A Liability — not UM coverage at all

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