Free practice exam · no signup needed

Maine Personal Lines Practice Exam

20 exam-style questions drawn from the same bank as our full Maine Personal Lines course (Maine 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. An applicant for an HO-3 tells the agent on Monday she needs immediate coverage to close on her new home Tuesday morning. The agent issues a written binder for 60 days while underwriting reviews the application. The home is destroyed by lightning on Wednesday. The applicant had not yet paid the premium. The insurer must:
Pay only after the insured signs the formal policy paperwork, binder claims are held in suspense until full underwriting acceptance and signed deliveryPay because the binder created an enforceable temporary contract; the insurer's recourse is to collect or net out the premium from the loss paymentPay only ACV, binders restrict loss settlement to actual cash value regardless of the loss-settlement basis the eventual policy would have providedDeny because no premium was paid, under the strict 'consideration-first' rule a binder is unenforceable without premium tender before the loss occurrence
2. An insured rents the basement apartment of her home to a tenant for $1,400/month. A covered fire makes the basement unit uninhabitable for four months while repairs are completed. The tenant relocates and stops paying rent. The insured had no separate business income coverage. How does her HO-3 respond to this rental income loss?
It does not respond, rental of part of the dwelling voids Coverage DCoverage D Fair Rental Value reimburses the lost rent, up to the Coverage D limitCoverage E personal liability covers the lost rent because the tenant suffered a lossCoverage B Other Structures applies because the basement is a separate occupancy
3. Personal umbrella policies typically EXCLUDE which of the following?
Coverage for the named insured's family members residing in the household under the broader insured-family extensionCoverage above primary auto liability for bodily injury and property damage caused by an at-fault insured driverLiability arising from business pursuits, professional services, intentional acts, and certain other named itemsPersonal liability for non-business activities at the residence premises and elsewhere worldwide for the insured family
4. A PAP insured borrows a friend's pickup to move a couch on a Saturday. While turning into the friend's driveway, he hits a fence. The friend's PAP carries 100/300 BI, $50,000 PD, and collision with a $500 deductible. The borrower has his own PAP with the same coverages. Under the 'other insurance' rules, the friend's auto policy is:
Voided by the unannounced loan to a non-resident under the policy's notice-of-change-in-operator provisionPrimary for liability under Part A, but excess for physical damage under Part D when a non-resident operator is involvedExcess over the borrower's own PAP for both liability AND physical damage under the 'follows-the-driver' allocation rulePrimary for liability and physical damage (the owner's policy follows the vehicle)
5. Two siblings are evaluating policies for very different living situations: Sibling A owns a single-family home; Sibling B rents a duplex unit. Their producer recommends HO-3 for A and HO-4 for B. Which best explains why the two forms exist instead of using one form for both?
HO-4 omits Coverage A and Coverage B because tenants have no insurable interest in the building structureHO-4 automatically includes flood coverage as a built-in renter benefit while HO-3 carries the standard flood exclusion requiring NFIP coverage to fillHO-3 is named-peril and HO-4 is open-peril, so each form targets a different consumer risk-tolerance segment under the standard form-selection guidanceHO-4 has a higher Coverage C personal-property limit than HO-3 because tenants typically own more loose contents than owner-occupants of comparable dwellings
6. An insured's friend borrows the car with permission and then lets HIS girlfriend (whom the named insured has never met) drive it. The girlfriend causes an at-fault accident. Coverage typically depends on:
Whether the first permittee (the friend) was physically present and seated as a passenger in the covered auto at the exact time of the at-fault loss, with continuous-presence supervision being the dispositive conditionWhether the girlfriend has her own personal auto policy in force at the time of the wreck, if she carries any auto coverage of her own, the named insured's PAP excludes her absolutely as a second-permittee operator regardless of permissionWhether the named insured signed a notarized permission-to-loan form expressly authorizing delegation of operation to second-tier permittees, which is a contractual condition precedent to second-permittee coverage under every state's filed PAP formWhether the named insured's permission could reasonably be implied to extend to a second-tier permittee, many policies cover the second permittee if the first had implied authority to delegate
7. A PAP insured listed her garaging address as a small town with low premiums. She actually parks the car overnight in a high-rate metropolitan ZIP code where she lives most weeknights. The misrepresentation is discovered after a $40,000 collision claim. The carrier may:
Pay the claim at the lower-territory premium ratio pro-rated against the territory premium that would have been chargedPay the claim but cancel the policy going forward under the state's prospective-only cancellation rule for rating misstatementsDeny the claim and rescind the policy from inception for material misrepresentationDo nothing, garaging address is informational under the application and is not material to underwriting acceptance
8. A homeowner's collection of firearms is stolen in a burglary; the loss is $6,500. The unendorsed HO-3 has a special-limit sublimit on firearms theft. How does Coverage C respond?
Pays $500, the money, securities, and bank-notes special sublimit applies to firearms theft claimsPays $6,500 in full because firearms are categorized as unsublimited Coverage C personal property under the formPays $2,500, the special theft sublimit on firearms and related equipmentPays nothing, theft of firearms is categorically excluded from Coverage C under standard HO-3 form provisions
9. An insured carries UMPD (uninsured motorist property damage) with a $250 deductible. Her parked car is struck by a hit-and-run driver overnight. Under most policies, what is the most common issue with paying a UMPD claim for a phantom vehicle?
UMPD always pays first ahead of collision coverage regardless of physical contact requirements under the standard primary-UMPD rule for parked vehiclesMany policies exclude UMPD for hit-and-run unless there is physical contact AND the vehicle is identified, pushing the loss to collision insteadUMPD waives the standard property-damage deductible entirely whenever the insured vehicle was parked and unoccupied at the moment of the loss eventUMPD pays only when the insured carries no collision coverage on the policy at the time the parked-vehicle hit-and-run loss occurred
10. Lightning strikes a tree outside an insured's home. The tree falls onto a power line, which arcs and starts a brush fire. The brush fire spreads to the insured's detached garage, which burns to the ground. The HO-3 policy covers fire and lightning but excludes 'damage caused by power surge.' The garage damage is:
Covered only up to 10% of Coverage A under the other-structures sub-limitExcluded, because lightning damage to the tree is the initial perilExcluded, because the chain of events began with a power-line arcCovered, because fire, not power surge, is the proximate cause of the garage loss
11. An insured moves from one state to another mid-term and continues driving his PAP-insured vehicle. The most important agent action is to:
Notify the carrier promptly, rates, mandatory coverages (such as no-fault or UM minimums), and form availability differ by state, and the carrier may need to rewrite the policy in the new stateTake no further action with the carrier because the personal auto policy follows the insured into any new state of garaging automatically without any rate, form, or filing changes requiredCancel the personal auto policy immediately and refund unused premium back to the insured, leaving the insured uninsured pending a new application with a state-licensed carrier in the destination stateChange only the mailing address of record with the carrier; the underlying rates, forms, mandatory coverages, and territory rating remain unchanged because the insured is the same regardless of garaging state
12. On a personal liability policy, the insurer's right to settle a claim within policy limits is typically:
Subject to the insured's consent in all cases under the mandatory hammer-clause provision of standard personal-lines casualty policies in every stateReserved to the insurer; the insured generally does not have a 'consent to settle' right unless specifically endorsedRequired to be approved by the state insurance regulator under the pre-settlement administrative approval rule of personal-lines casualty lawLimited to property damage claims under the partial settlement-discretion rule that preserves the insured's veto right over any bodily injury or third-party tort claim
13. An NFIP policy excludes which of the following?
Loss to landscaping, decks, and detached structures other than a detached garageInundation of normally dry land when the inundation results from overflow of tidal or inland watersStorm-surge flooding from a hurricane when the surge enters from the seaward side of the dwellingLoss caused by mudflow originating from saturated hillside soil during a rapid accumulation event
14. When the language of an insurance policy is ambiguous, courts most commonly:
Side with the insurer because it is the larger party with deeper resources to defend the contested provisionConstrue the ambiguity against the insurer (the drafter) and in favor of the insuredStrike the entire provision and treat the entire policy as void from the inception date of the contractRefer the case to the state insurance department for an administrative interpretation under the policy form file
15. A homeowner is on a weekend trip and walks his dog through a public park. The dog, normally docile, bites a jogger, requiring stitches and ER care totaling $9,200. The insured carries an HO-3 with Coverage E $300,000 and Coverage F $5,000. No dog-bite exclusion is in place. How does the policy respond to the jogger's claim?
Coverage E pays only after a court rules and judgment is entered, no payment is made until a final adjudication of liability is reachedOnly Coverage C responds, because the dog is personal property of the insured and bodily-injury claims attaching to owned animals are limited to Coverage CIt does not respond because Section II incidents occurring away from the residence premises are excluded under the standard 'off-premises pet activity' barCoverage F pays up to $5,000 regardless of fault, and Coverage E pays any liability damages above that if the insured is legally responsible
16. Which applicant is the best candidate for a farmowners policy rather than a homeowners policy?
An investor who owns cropland but lives in a city apartment and leases the ground to a tenantA suburban owner whose only agricultural activity is a fenced vegetable garden behind the houseA grain elevator operator who buys and resells crops from a commercial site with no residenceAn owner who lives in a farmhouse on acreage and also raises livestock and stores equipment in barns
17. A homeowner carries 100/300/100 BI/PD on her PAP and $500,000 of Coverage F on her HO-3. She wants a $2,000,000 personal umbrella. The umbrella insurer requires minimum underlying limits of 250/500/100 on auto and $300,000 on HO liability. The insured's current limits:
Meet HO but not auto, she must raise PAP BI before the umbrella will be issuedMeet the umbrella's underlying-limits requirement on both the auto and HO schedules under the carrier's filed minimumsAre irrelevant to the umbrella, true umbrellas drop down to ground zero and absorb the missing primary layerMeet auto but not HO, she must lower HO liability to align with the umbrella's underlying cap
18. An insured carries a CSL (combined single limit) of $300,000. He is at fault for one accident causing $250,000 BI to one claimant and $80,000 PD to two vehicles. The carrier will pay:
$100,000 paid because the standard per-person bodily-injury cap under a CSL is one-third of the per-accident combined limit electedUp to $300,000 total across BI and PD combined, the carrier pays $300,000 and the insured is exposed for the remaining $30,000$300,000 BI and an additional $300,000 PD because the CSL applies separately to each loss category under the standard split-application rule$250,000 BI plus $80,000 PD = $330,000 paid because a CSL doubles its limit when a single accident produces both BI and PD claims
19. On a casualty (liability) policy, the insuring agreement typically promises to:
Repair or replace damaged property of the insured under the first-party physical-damage coverage of the casualty formPay damages the insured is legally obligated to pay because of bodily injury or property damage caused by an occurrencePay the insured's deductible under the loss-fund retention provision of the standard casualty insuring agreement filingDefend any lawsuit, regardless of subject matter, under the broad duty-to-defend extension that applies to all claims
20. Coverage D under a dwelling form is:
Other structuresPersonal liabilityPersonal propertyLoss of use / fair rental value

Want a different set? Refresh the page for 20 new questions — the full course has 500+, each with a complete explanation, plus full-length timed exam simulations and an AI tutor.