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Iowa Personal Lines Practice Exam

20 exam-style questions drawn from the same bank as our full Iowa Personal Lines course (Iowa Insurance Producer — Personal Lines — 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. After a kitchen fire an insured submits a sworn proof of loss inventory listing a 75-inch television, a leather sectional, and a designer espresso machine. The adjuster suspects the inventory is inflated and requests an Examination Under Oath. The insured refuses, citing 'invasion of privacy.' Under standard HO conditions, the insurer may:
Deny the claim in full for failure to comply with a condition precedent to coverageCancel the policy mid-term but pay the current claim under the standard 'unilateral cancellation' provision found in HO formsPay the undisputed portion only and reserve the contested items for declaratory-judgment litigation against the insuredRefer the matter to the state DOI's market-conduct division for binding arbitration under the unfair-claim-practices act
2. A misrepresentation on a casualty insurance application that is intentional and material may:
Affect only future policies through nonrenewal under the renewal-only-effect prospective ruleAlways require court approval to act on under the regulatory rescission-approval procedureProvide grounds for the insurer to rescind the policy from inceptionBe ignored by the carrier as immaterial to the underwriting decision on the casualty risk
3. Notice of claim or notice of loss must typically be given:
Promptly, as soon as practicable after the loss is knownOnly at policy renewal when the insurer requests prior-loss disclosure on the renewal application questionnaireAfter litigation begins by a third party against the insured under the late-notice tender provisions of the policyWithin one year of the loss under the contractual statute of limitations on suit against the insurer for nonpayment
4. If an insured has no insurable interest at the time a liability claim is asserted, the policy:
Will pay if there was insurable interest at policy inceptionPays only the policy limitWill not respond — the insured has no protectable exposureWill pay regardless
5. Which loss-settlement basis applies to the principal residence under an NFIP Dwelling Form when the insured carries at least 80% of replacement cost?
Market valueActual cash valueReplacement costFunctional replacement cost
6. Which coverage on a homeowners policy responds when a covered loss makes the dwelling uninhabitable and the family must rent a hotel?
Coverage DCoverage BCoverage CCoverage A
7. A producer is writing coverage for a young couple who just signed a one-year lease on an apartment. They want coverage for their furniture, electronics, and clothing against fire and theft, plus personal liability if a guest is injured in the unit. They have no ownership interest in the building or any structures. Which homeowners form is designed for this exposure?
HO-4 contents broad form (tenants)HO-3 special formHO-6 unit-owners formHO-2 broad form
8. An aleatory contract is one in which:
Both parties pay the same amount under the matched-performance rule that governs commutative insurance contracts at lawThe performance owed is equal in both directions throughout the term of the contract regardless of any loss eventThe amounts exchanged depend on a chance event — the insurer may pay much more or much less than the premium receivedPerformance is impossible at the time of contract formation because the loss event has not yet been determined to occur
9. A PAP insured rents a car for a weeklong vacation. He decides to decline the rental car company's loss-damage-waiver to save money. He believes his PAP covers the rental. He damages the rental in a parking lot. His PAP carries 100/300 BI, $50,000 PD, comprehensive and collision with $500 deductibles on his owned sedan. Coverage for the rental:
Applies only if the insured purchased the rental company's collision damage waiver, which must be in force for the PAP's non-owned-auto extension to drop down behind it as excess coverage at the time of lossApplies only for liability under Part A; physical damage to the rental vehicle requires the specifically-filed 'rental physical damage endorsement' added at policy inception with an additional premium chargeDoes not apply — short-term rentals are categorically excluded from the PAP definition of 'your covered auto' and require a separate non-owned-auto endorsement filed and rated as a commercial-auto extensionApplies — the rental qualifies as a 'temporary substitute' or 'non-owned auto'; physical-damage coverage extends to it on the same terms as the broadest coverage on any owned auto
10. An insured schedules a $15,000 fur coat on a Scheduled Personal Property (Personal Articles) endorsement. While traveling abroad, the coat is lost (left in a taxi and never recovered). The endorsement responds because it provides:
Worldwide, open-peril coverage including mysterious disappearanceACV-only coverage after depreciationCoverage only at the residence premisesNamed-peril coverage only — mysterious disappearance is excluded
11. Which dwelling form is similar in scope to the homeowners HO-2 form?
DP-8DP-1DP-2DP-3
12. An insured operates a small dog-grooming business out of a detached studio behind the home. The studio is destroyed by fire. Under an unendorsed HO-3, how does Coverage B respond?
Coverage B pays subject only to a business deductibleNo coverage — Coverage B excludes structures rented to or used for businessCoverage B pays 50% because the studio has dual useFull Coverage B limits apply because the studio is on the residence premises
13. An insured's dwelling is damaged by a covered fire. The dwelling is insured for $250,000 (= 100% of RC). Repair cost is $180,000. The HO-3 includes the standard replacement-cost loss-settlement provision (no holdback waiver). The insured tells the adjuster he plans to take the cash and NOT repair. The insurer will pay:
ACV of the damaged portion only, with the RC-vs-ACV difference paid ONLY upon completion of repairs$180,000 less a flat 30% holdback applied regardless of the insured's stated repair intent under the standard provision$250,000 — the full Coverage A limit, paid as a valued-policy settlement once the insured elects total cash-out treatment$180,000 in full RC because the insured met the 80% coinsurance threshold and elected cash-out under the partial-loss provision
14. An insured's laptop is stolen from a coffee shop. He has Coverage C on his HO-3 ($30,000 limit, $1,000 deductible, $1,500 special sublimit on electronics off-premises) AND a homeowners-rider scheduled-personal-property floater on the same laptop at $2,400 agreed value. The laptop's ACV is $2,400. Under standard 'other insurance' provisions, the floater is:
Primary — the HO-3 is excess over scheduled-property coverageExcess — the HO-3 pays first up to its $1,500 sublimitPro-rated equally with the HO-3 Coverage CVoid because of double coverage on the same item
15. Compulsory auto insurance laws require:
Drivers to carry PIP only under the no-fault first-party benefit mandate adopted by statesAll drivers to be self-insured through filing a financial-responsibility bond with the state DMVDrivers to carry comp and collision under the mandatory physical-damage statutesDrivers to carry liability insurance at minimum statutory limits
16. An insured loans his car to a coworker for the afternoon. The coworker causes an at-fault accident. The insured's PAP responds under the:
Omnibus (permissive use) clause — the coworker is an insured because she was using the covered auto with permissionLiability extension endorsement, which must be separately purchased in advance in order to cover any non-resident permissive drivers of the autoFriends-and-family rider, which is automatic but excludes coworkersNamed-driver provision — only listed drivers are insureds
17. A PAP insured has a 19-year-old son with three at-fault accidents in two years. The carrier offers to keep the policy in force IF the son is excluded by name. The parents sign a named-driver exclusion endorsement. Two months later the son borrows the family car (with permission), runs a stop sign, and injures a pedestrian. The PAP responds:
Liability is excluded for the son's operation; physical damage to the family car may still applyLiability and PIP still apply because the named insured (the parent) owns the vehicleNo coverage of any kind applies because the son is an excluded named driver on this policyCoverage applies, but the carrier may sue the parents to recover whatever it pays out
18. The 'policy territory' or 'coverage territory' clause defines:
The states in which the agent is licensed to solicit and write new businessThe maximum policy limit available for any single covered occurrence under the formThe geographic area within which the policy responds to lossesThe age of the insured named on the declarations page at policy issuance
19. An insured's windshield is cracked by a rock thrown up by a passing truck. Her policy includes a 'full glass' option. The most likely outcome is:
The glass repair is covered under collision with the deductible appliedFull glass coverage only applies to side windows, not windshieldsThe repair is denied because passing-truck damage requires a third-party claimThe glass repair is covered under comprehensive with the deductible waived
20. When a Personal Articles Floater uses 'agreed value,' what does that mean?
The insured must prove ownership at the time of loss through receipts and serial numbers consistent with the proof-of-loss requirements that apply to all unscheduled propertyThe insurer determines the value at the time of loss using the standard ISO actual cash value depreciation schedule applied to scheduled propertyThe insured and insurer pre-agree to the item's value, and that figure is paid in the event of total lossCoverage is limited to the depreciated value using the same straight-line method that applies to unscheduled personal property under the homeowners Coverage C provision

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