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Massachusetts Personal Lines Practice Exam

20 exam-style questions drawn from the same bank as our full Massachusetts Personal Lines course (Massachusetts 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 insured carries split limits of $100/300/100. He is at fault in an accident that injures three passengers, claims of $80,000, $120,000, and $60,000, and causes $40,000 in property damage. How much does the carrier pay?
$80,000 + $100,000 + $60,000 = $240,000 BI plus $40,000 PD = $280,000 total$100,000 BI as a single per-person cap regardless of how many people are injured, plus $40,000 PD = $140,000 total$300,000 BI (per-accident aggregate cap) plus $40,000 PD = $340,000 total payment after applying split-limit rules$100,000 per person × 3 claimants = $300,000 BI plus $40,000 PD = $340,000 total recovery paid out
2. Notice of nonrenewal on a casualty policy is generally required:
On the renewal date itself under the same-day notice rule applied to casualty insuranceWithin 10 days of the renewal date under the post-expiration notice provision of casualty lawOnly orally through a telephone call to the named insured before the casualty policy expiresA specified number of days (commonly 30-60) before the policy's expiration date, in writing
3. A 'newly acquired auto' is:
Covered only if it is identical to a listed vehicle in make, model, year, body style, and territory of garaging, under the like-kind substitution rule that applies when an existing covered auto is replaced with a comparable replacement vehicleCovered only on the next renewal of the policy when the underwriter reviews the household vehicle list and rates the new acquisition based on the current driving record and territory of the named insured on the contractAutomatically covered for a stated period (commonly 14 days for additional vehicles, 4 days for replacement) without prior notice, subject to policy conditionsExcluded from coverage until reported to the insurer and added to the declarations page by formal endorsement with an additional premium charge collected at the time the vehicle is added to the policy by the underwriter on file
4. An insured notices hairline cracks in a foundation wall over a period of years as the soil beneath the home gradually settles. Eventually a portion of the basement wall bows inward by 3 inches and requires major underpinning. Repair estimate: $48,000. The HO-3 contains the standard earth-movement and settling exclusions. How does the policy respond?
Excluded, because settling, cracking, bulging, and earth movement are specifically excluded under HO formsCovered, but only after subtracting the separate foundation deductible that applies to such repairsCovered as a collapse loss under the HO additional coverage for a collapsing building wallCovered, because open-peril Coverage A pays for any loss that the exclusions do not specifically name
5. Under most homeowners policies, watercraft liability is covered for boats meeting all of the following EXCEPT:
Sailboats less than 26 feet in lengthA 35-foot inboard powerboat used for recreationNon-owned watercraft within stated limitsOutboard motor boats with motors of 25 horsepower or less
6. An insured has flood damage to a basement. Under an NFIP Dwelling Form, basement contents are:
Fully covered up to the contents limit, parallel to how aboveground rooms are treated under the NFIP Dwelling FormCovered with limited categories (clothes washers/dryers, freezers, certain appliances)Excluded entirely from the NFIP Dwelling Form contents coverage regardless of category or locationCovered only on a named-peril basis under the basic ISO inland marine flood schedule for residential property
7. Section II of a homeowners policy provides which of the following?
Replacement cost coverage on contentsPersonal liability and medical payments to othersLoss-of-use coverage and additional living expenseProperty coverage on the dwelling and personal property
8. An 'occurrence' on a liability policy is generally defined as:
A claim made by a third party against the insured and tendered for defense during the policy periodA single sudden event only that takes place at one identifiable point in time within the policy periodAn accident, including continuous or repeated exposure to substantially the same general harmful conditionsAny event reported during the policy period, regardless of when the underlying injury or damage actually arose
9. A guest is injured at the insured's vacation cabin (listed as an additional insured location on the policy). Coverage E responds because:
Coverage E follows the insured wherever they travel, even unlisted propertiesAll bodily injury is covered worldwide regardless of locationVacation properties always require flood coverage to trigger liabilityThe cabin meets the definition of 'insured location' as scheduled on the declarations
10. In a liability context, the principle of indemnity means an insurer pays:
Nothing if a third party caused the loss because of the tortfeasor's primary liabilityAn arbitrary settlement chosen by the carrier without regard to legal liabilityAlways the policy limit regardless of the insured's actual legal obligation owedThe amount the insured is legally obligated to pay, up to policy limits
11. An insured's teenage son gets into a heated argument with a classmate at school and intentionally punches him, breaking the classmate's jaw. The classmate's parents sue the insured (the parent) for $80,000 in damages. The HO-3 has Coverage E $300,000. The standard HO Section II intentional-act exclusion is in place. How does the policy respond?
Covered only for the medical-bills portion under Coverage FExcluded only for the punching son; still fully covered for the parent under a vicarious-liability theory of negligent supervisionExcluded, Section II excludes bodily injury or property damage that is expected or intended by the insuredCovered, Coverage E pays any bodily injury caused by an insured under age 18
12. An insured with an HO-3 (Coverage C limit $75,000) travels for work and leaves a laptop ($1,800) and a suitcase of clothing ($2,400) in a hotel room. Both are stolen. The insured has no separate inland marine floater on the laptop. How does Coverage C respond?
It responds for the full $4,200 less the deductible because theft is a Coverage C named peril and the off-premises sublimit does not apply to itinerant lossIt responds only for the suitcase contents; laptops are categorically excluded from unscheduled Coverage C and require a scheduled-personal-property floaterIt does not respond, Coverage C is restricted to property physically located at the insured's residence premises and excludes any off-premises personal-property lossesIt responds, but off-premises personal property is limited to 10% of Coverage C ($7,500) or $1,000, whichever is greater, less the deductible
13. 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 extensionPersonal liability for non-business activities at the residence premises and elsewhere worldwide for the insured familyLiability arising from business pursuits, professional services, intentional acts, and certain other named itemsCoverage above primary auto liability for bodily injury and property damage caused by an at-fault insured driver
14. An insurance contract is described as a contract of adhesion because:
The state writes the contract through the prescribed standard-form provisions issued by the regulatorThe insured 'adheres' to the take-it-or-leave-it terms drafted by the insurerBoth parties draft it together through arm's-length negotiation of every term in the policy formThe agent draws up custom contracts based on each applicant's individual risk profile and exposure factors
15. Insurance contracts are described as 'unilateral' because:
Only the insured may terminate the contract at any time, with the insurer being permanently bound to perform once it has accepted the application and issued the policy on the basis of the disclosed riskEither party can rescind the contract at any point during the policy term without cause, without notice, and without any return-premium calculation under the standard rescission procedure that applies to all insurance contractsOnly one party signs the contract at issuance, even though both parties are bound by the terms once premium has been collected and the binder issued for the requested coverage period of the policyOnly the insurer makes a legally enforceable promise to perform; the insured has paid premium and need not act further unless a loss occurs
16. Marcus owns a 12-year-old recliner that cost $900 when new. It is destroyed by a covered fire. A new comparable recliner today retails for $1,100. The insurer's depreciation schedule rates upholstered furniture at 7% per year. Marcus's HO-3 settles Coverage C losses on an actual cash value basis with no replacement-cost endorsement. What is the most his insurer will pay before the deductible?
$176, replacement cost less 84% accumulated depreciation$132, the estimated salvage value of the destroyed recliner$1,100, today's cost to replace the chair with a new one$900, the original purchase price Marcus paid when new
17. An insured carries med pay with a $5,000 limit and group health insurance through his employer. He is injured in his own vehicle and incurs $8,000 in medical bills. Under most med pay 'other insurance' provisions, the insurer will:
Pay up to the $5,000 med pay limit regardless of what health insurance pays; coordination of benefits between med pay and health is determined by the health policy's termsPay only after the insured exhausts every other source of recovery, including group health insurance, workers compensation, and any third-party tort claimPay nothing, because group health insurance is always primary to PAP med pay under the standard cross-coverage coordination-of-benefits rule applied by carriersPay $3,000, which is only the amount that the insured's group health insurance leaves unpaid after its deductible and coinsurance have been applied
18. Defenses to a negligence claim include:
Strict liability for ultrahazardous activities raised by the defendantContributory/comparative negligence, assumption of risk, and statute of limitationsIntent under the willful-misconduct tort theory pleaded by the plaintiffVicarious liability raised under the respondeat-superior doctrine here
19. On a casualty policy, proof of loss generally must be:
Made by oral statement only to the field adjuster at the time of the inspection under the verbal-statement-suffices rule that applies to small first-party property and casualty losses below a stated thresholdNotarized in all cases by a commissioned officer before submission to the carrier under the post-loss attestation provision of the standard casualty policy form filing in every stateA signed and sworn statement by the insured detailing the loss, typically within a stated period after the insurer's requestFiled before the insured leaves the scene of the incident under the on-scene proof-of-loss requirement applicable to casualty claims arising on the insured premises during the policy period
20. On the ISO Personal Auto Policy (PAP), Part A provides:
Uninsured motorist coverage for the insured's own injuriesPhysical damage coverage for the insured's own vehicleMedical payments for the insured and passengersLiability coverage for bodily injury and property damage

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