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Oklahoma Personal Lines Practice Exam

20 exam-style questions drawn from the same bank as our full Oklahoma Personal Lines course (Oklahoma 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 liability and PIP but NO collision or comprehensive on his PAP. He rents a car and damages it. The rental agency's collision damage waiver:
Would have been important to purchase, without his own physical damage coverage, the PAP will not pay to repair the rentalIs irrelevant, the rental company always absorbs any rental-vehicle damage as a built-in cost included in the daily rental fee paidPays only the underlying collision deductible amount and nothing more under the supplementary-payments extension to non-owned-auto operationVoids any PAP liability coverage that would otherwise apply to the operation of the rental as a non-owned auto under the standard liability provision
2. A fire makes an insured's HO-3 dwelling uninhabitable. The family rents a comparable house for $3,200/month while their home is being repaired. Their normal mortgage, utilities, and food costs at home averaged $2,800/month. How much will Coverage D Loss of Use reimburse per month, assuming the limit is adequate?
$400, the difference between rental and normal costs (additional living expense)Nothing, Coverage D applies only to fair rental value, not insured-family displacement$2,800, the family's normal monthly cost of living at the damaged home$3,200, the full monthly rental cost paid for the substitute residence
3. 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$300,000 BI (per-accident aggregate cap) plus $40,000 PD = $340,000 total payment after applying split-limit rules$100,000 BI as a single per-person cap regardless of how many people are injured, plus $40,000 PD = $140,000 total$100,000 per person × 3 claimants = $300,000 BI plus $40,000 PD = $340,000 total recovery paid out
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:
Excess over the borrower's own PAP for both liability AND physical damage under the 'follows-the-driver' allocation rulePrimary for liability under Part A, but excess for physical damage under Part D when a non-resident operator is involvedVoided by the unannounced loan to a non-resident under the policy's notice-of-change-in-operator provisionPrimary for liability and physical damage (the owner's policy follows the vehicle)
5. 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
6. An insurer pays its insured $40,000 for a loss caused by a third party. The insured later collects $30,000 directly from the third party for the same loss. Under subrogation principles, the insured:
Must split the $30,000 equally with the insurer under the equal-shares third-party recovery allocation ruleKeeps the entire $30,000, it is unrelated to the insurance contract and the third-party action is independentMust reimburse the insurer up to the amount the insurer paid (subject to the made-whole doctrine)Owes nothing because the insurer cannot subrogate after payment under the post-settlement waiver of recovery rule
7. 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 insurerThe agent draws up custom contracts based on each applicant's individual risk profile and exposure factorsBoth parties draft it together through arm's-length negotiation of every term in the policy form
8. A homeowner is sued by a contractor who fell on her icy driveway. She does NOT notify her HO-3 carrier; instead she hires her cousin's attorney, defends herself, and loses a $90,000 judgment. She then submits the judgment to her HO-3 carrier under Coverage F (Personal Liability) and demands reimbursement. The carrier's BEST response is to:
Deny payment because Coverage F categorically excludes any bodily injury claim made by a person classified as the insured's inviteePay only the legal-defense portion as a supplementary payment in addition to limits under the policy's supplementary-payments provisionPay the judgment up to the Coverage F medical-payments-to-others limit because the underlying loss is a covered third-party premises injuryDeny the claim because the insured breached her duty to forward suit papers and cooperate, prejudicing the insurer's defense
9. Risk-management techniques include avoidance, retention, transfer, and reduction. Buying insurance is primarily an example of:
Risk retentionRisk avoidanceRisk transferRisk reduction
10. Limitations and exclusions on a personal liability policy commonly remove coverage for:
All bodily injury claims regardless of cause or origin under the policy formPremises losses only that arise on the insured location during the policy termIntentional acts, business pursuits, owned aircraft, and certain auto exposuresProperty of the insured covered by the underlying property coverage of the policy
11. 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 $3,000, which is only the amount that the insured's group health insurance leaves unpaid after its deductible and coinsurance have been appliedPay nothing, because group health insurance is always primary to PAP med pay under the standard cross-coverage coordination-of-benefits rule applied by carriersPay only after the insured exhausts every other source of recovery, including group health insurance, workers compensation, and any third-party tort claim
12. On the PAP, transportation expenses (rental car) following a covered comp/collision loss:
Have a daily and total maximum (commonly $30/day up to $900) and apply only after a covered lossAre not available without a separately purchased optional endorsement adding rental-reimbursement coverage to the PAPAre paid only on theft losses and are excluded when the rental need arises from a collision or comprehensive eventAre unlimited and continue to pay for the full duration that the insured remains without the use of the auto
13. An insured has $250/500/100 on his PAP and a $1,000,000 personal umbrella with a required underlying PAP limit of $250/500/100. He is at fault in a wreck causing $900,000 BI to a single claimant. The carriers respond:
PAP pays $500,000 (its per-occurrence limit); the umbrella pays the next $400,000The umbrella pays $900,000 directly because the PAP per-person limit is too lowPAP pays $250,000 (its per-person limit); the umbrella pays the next $650,000 on topPAP pays $250,000; the umbrella denies because per-person limits do not match its underlying schedule
14. An insured carries Coverage A of $300,000 on her HO-3. A tornado destroys both the main dwelling AND a detached two-car garage on the property. The garage replacement cost is $42,000. The HO-3 form provides Coverage B as a percentage of Coverage A with no separate scheduling required. Assuming the standard unendorsed limit, what is the most the policy will pay for the garage?
$60,000, 20% of Coverage A$15,000, 5% of Coverage A$30,000, 10% of Coverage A$42,000, full replacement cost
15. An insured wants to reject UM/UIM coverage to save premium. The agent verbally confirms the rejection over the phone and notes it on the application. Two months later, the insured is injured by an uninsured driver. The carrier denies UM. The most likely result is:
UM attaches at the state's minimum financial-responsibility limit because any partial rejection of UM defaults coverage to the statutory floorThe producer is personally and individually liable for the full UM limit out of pocket as a matter of agent-of-record E&O personal exposureThe denial stands because the agent's application notation of the verbal rejection satisfies the statutory written-rejection requirementUM attaches at limits equal to the liability limits because verbal rejection is not valid, a signed written rejection is required
16. An insured is struck by a hit-and-run driver in a parking lot. There are no witnesses and no physical contact between the vehicles, the other car swerved, the insured swerved to avoid it, and hit a pole. Which UM coverage issue most directly determines whether her claim is payable?
Whether the other driver was later identifiedWhether she filed a written police report within twenty-four hours and obtained a signed witness affidavit at the accident sceneWhether the insured carries collision coverageWhether the policy requires actual physical contact with the phantom vehicle (the 'miss-and-run' rule)
17. An insured deliberately sets fire to her own warehouse to collect insurance proceeds. This reflects which type of hazard?
Moral hazardMorale hazardPhysical hazardCatastrophic hazard
18. In a liability context, the principle of indemnity means an insurer pays:
An arbitrary settlement chosen by the carrier without regard to legal liabilityAlways the policy limit regardless of the insured's actual legal obligation owedNothing if a third party caused the loss because of the tortfeasor's primary liabilityThe amount the insured is legally obligated to pay, up to policy limits
19. Which dwelling form is the broadest in coverage and the only one to provide open-peril coverage on the dwelling?
DP-1All three are the sameDP-3DP-2
20. An owner inherits an older single-family dwelling that has been vacant for eight months while the estate is settled. She wants property coverage on the vacant dwelling pending sale. Standard HO-3 carriers decline because the home is not owner-occupied AND is vacant. Which approach is the most appropriate for the eligibility and exposure?
Write no policy at all because vacant residential dwellings are categorically uninsurable in any admitted-market line during the estate-settlement period before saleWrite a DP-1 with optional VMM (vandalism and malicious mischief) coverage or a specialty vacant-dwelling policy, recognizing that long-vacant properties carry restrictions or surchargesForce-place an HO-3 by signing an occupancy affidavit declaring intent-to-occupy within 90 days, which qualifies the dwelling for owner-occupied residence-premises eligibilityWrite an HO-4 contents-only policy on the estate's tangible property as a temporary chassis pending sale or owner-occupancy decision under the estate-administration extension

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