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Free Arizona Examination for Personal Lines Insurance Producer Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Arizona Examination for Personal Lines Insurance Producer practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1Before Arizona approves an individual resident producer application, what minimum age must the applicant have reached?

    1. A. 18
    2. B. 19
    3. C. 20
    4. D. 21

    Answer: A

    Explanation: A.R.S. § 20-285(B)(1) requires the director to find that the applicant "Is at least eighteen years of age."

    Reference: 20-285 - Application for license — A.R.S. § 20-285(B)(1)

  2. 2An insurer raises an applicant's premium partly because of information in a consumer report. What must the insurer provide under the FCRA?

    1. A. A notice of adverse action to the applicant
    2. B. A policy cancellation notice to the state regulator
    3. C. A copy of the entire underwriting file to the applicant
    4. D. A written offer of replacement-cost coverage

    Answer: A

    Explanation: The FTC states that when an insurance decision "is based partly or completely on information in a consumer report, Section 615(a) of the FCRA requires you to provide a notice of the adverse action to the consumer." A higher rate is an adverse action, so the insurer must notify the applicant.

    Reference: Consumer Reports: What Insurers Need to Know — Adverse Action Notices under the FCRA

  3. 3A family buys an insurance policy to shift the financial effect of an accidental house fire to an insurer. Which method of handling risk is illustrated?

    1. A. Avoidance
    2. B. Retention
    3. C. Reduction
    4. D. Transfer

    Answer: D

    Explanation: NAIC describes insurance as "an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling." Buying the policy is transfer of financial risk to the insurer.

    Reference: NAIC Glossary of Insurance Terms — Glossary, Insurance

  4. 4A tenant owns furniture in a rented house and would lose its value if it burned. Which relationship to the furniture establishes an insurable interest?

    1. A. Ownership that would cause the tenant a financial loss if it were damaged.
    2. B. Possession for a neighbor when the tenant bears no financial responsibility for it.
    3. C. Permission to use the furniture when the owner alone bears any financial loss.
    4. D. Knowledge of its location when the tenant has no ownership or financial stake.

    Answer: A

    Explanation: NAIC defines insurable interest as a relationship under which the insured "can suffer a financial loss from damage, loss or destruction to it." The tenant owns the furniture and would lose its value; mere possession, permission or knowledge without a financial stake does not establish this interest.

    Reference: NAIC Glossary of Insurance Terms — Glossary, Insurable Interest

  5. 5A client owns a vacation cabin that is not their primary home and does not qualify for a standard homeowners package. Which policy family should the producer consider for the cabin itself?

    1. A. Dwelling property form.
    2. B. HO-3 special homeowners form.
    3. C. HO-4 renters form.
    4. D. HO-6 unit-owners form.

    Answer: A

    Explanation: NAIC says the dwelling property form "It’s also used for vacation homes and when you can’t find other coverage." The cabin fits that use. The other forms address eligible owner-occupied homes, renters, or condominium units instead of this vacation dwelling.

    Reference: NAIC Consumer's Guide to Homeowners Insurance — Types of home coverage, Dwelling Property Form

  6. 6A homeowner wants open-perils coverage for both the dwelling and unscheduled personal property. Which standard homeowners form matches that request?

    1. A. HO-3 Special Form
    2. B. HO-4 Renter's Form
    3. C. HO-6 Unit-Owners Form
    4. D. HO-5 Comprehensive Form

    Answer: D

    Explanation: NAIC states, "HO-5 (Comprehensive Form) – Provides comprehensive coverage, including open perils for both dwelling and personal property." The form's two open-perils property grants answer the client's request.

    Reference: NAIC 2025 Homeowners Definitions — Homeowners forms, HO-5 Comprehensive

  7. 7An insured driver negligently hits another person's parked car. Which part of the insured driver's personal auto policy addresses the other person's vehicle damage?

    1. A. Bodily injury liability
    2. B. Property damage liability
    3. C. Collision coverage
    4. D. Medical payments coverage

    Answer: B

    Explanation: NAIC says, "Property Damage Liability: This coverage pays for damages you cause to someone else’s car or to objects and structures your car hits." The other person's parked car is third-party property damage, not damage to the insured auto.

    Reference: NAIC Consumer's Guide to Auto Insurance — Liability coverage, Property Damage Liability

  8. 8A family asks what a personal umbrella can pay after a primary policy's applicable limit is exhausted. Which expense fits its usual role?

    1. A. The insured's own dwelling repair expense after the property limit is exhausted.
    2. B. Third-party injury liability and defense expense after the liability limit is exhausted.
    3. C. The insured's own car repair expense after the auto property limit is exhausted.
    4. D. The insured's own scheduled jewelry loss after its property limit is exhausted.

    Answer: B

    Explanation: NAIC says an umbrella "can also pay for liability and legal defense costs that exceed the amount your primary insurance policy will pay." That is third-party liability and defense, rather than excess first-party home, auto or jewelry repair/replacement.

    Reference: What's an Umbrella Policy? — Umbrella coverage, liability and defense

  9. 9How many times may Arizona allow a person to take the examination for the same line of authority within twelve months?

    1. A. Three
    2. B. Four
    3. C. Five
    4. D. Six

    Answer: B

    Explanation: A.R.S. § 20-284(H) says the director shall not allow the examination "more than four times within a twelve month period."

    Reference: 20-284 - Application for examination — A.R.S. § 20-284(H)

  10. 10An insurer proposes to disclose a consumer's nonpublic personal information to a nonaffiliated marketing firm, and no statutory exception applies. What must occur before the initial disclosure?

    1. A. The insurer must report the recipient's name to the regulator.
    2. B. The consumer must be given an opportunity to prevent the disclosure.
    3. C. The firm must first obtain a producer license for the same line.
    4. D. The consumer must be given a copy of the complete claim file.

    Answer: B

    Explanation: The GLBA text requires that "the consumer is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party;" For the stated nonaffiliated disclosure outside an exception, the consumer must have that choice before sharing.

    Reference: Gramm-Leach-Bliley Act Title V Subtitle A — GLBA Title V, Subtitle A, Opt out paragraph (b)(1)(B)

Topics in this practice bank

These topics describe the available practice for Arizona Examination for Personal Lines Insurance Producer. Review the examination outline and its sources for scope and allocation details.

  • Insurance Regulation
    • Licensing
    • Licensing > License application requirements (20-285)
    • Licensing > Number of exam attempts 20-284(H)
    • Licensing > Licensing eligibility/lawful presence (41-1080)
    • Licensing > Types of licensees
    • Licensing > Types of licensees > Producers (20-281(5), 286)
    • Licensing > Types of licensees > Nonresidents (20-281(11))
    • Licensing > Types of licensees > Adjusters (20-321)
    • Licensing > Types of licensees > Business entities (20-281(1), 285(D, E), 290(B))
    • Licensing > Types of licensees > Surplus lines brokers (20-407, 411)
    • Licensing > Types of licensees > Temporary (20-294)
    • Licensing > Types of licensees > Vending machines (20-293)
    • Licensing > Lines of producer license authority (20-286, (A), 321, 331, 332, 411, 411.01, 1580, 1693.01, 2662)
    • Licensing > Fingerprinting requirements (20-142(E), 285(E), 286(C), 289(D))
    • Licensing > Assumed business name (20-297)
    • Licensing > Maintenance and duration
    • Licensing > Maintenance and duration > Expiration, surrender and renewal (20-289)
    • Licensing > Maintenance and duration > Inactive license status during military service (20-289.01)
    • Licensing > Maintenance and duration > Change of personal contact information (20-286(C))
    • Licensing > Maintenance and duration > Change of business information (20-286)(C))
    • Licensing > Maintenance and duration > Report of actions (20-301)
    • Licensing > Maintenance and duration > Continuing education (20-2902, 2903)
    • Licensing > Disciplinary actions
    • Licensing > Disciplinary actions > Denial, suspension, revocation or refusal to renew; civil penalties (20-295, 296)
    • Licensing > Disciplinary actions > Cease and desist order (20-292)
    • State regulation
    • State regulation > Acts constituting insurance transaction (20-106, 282, 401.01)
    • State regulation > Acts constituting insurance transaction (20-106, 282, 401.01) > Negotiate (20-281(10))
    • State regulation > Acts constituting insurance transaction (20-106, 282, 401.01) > Sell (20-281(14))
    • State regulation > Acts constituting insurance transaction (20-106, 282, 401.01) > Solicit (20-281(15))
    • State regulation > Payment of premiums (20-191)
    • State regulation > Certificate of authority (20-217(A))
    • State regulation > Identification of Producer (20-229)
    • State regulation > Producer regulation
    • State regulation > Producer regulation > Sharing commissions (20-298)
    • State regulation > Producer regulation > Place of business and records (20-157, 290; AZ Const Art 14 s 16)
    • State regulation > Unfair practices and frauds
    • State regulation > Unfair practices and frauds > Unfair trade practices (20-442)
    • State regulation > Unfair practices and frauds > Misrepresentation (20-443, 443.01, 447; Rule R20-6-801(D))
    • State regulation > Unfair practices and frauds > False or deceptive advertising (20-444)
    • State regulation > Unfair practices and frauds > Defamation of insurer (20-445)
    • State regulation > Unfair practices and frauds > Boycott, coercion or intimidation (20-446)
    • State regulation > Unfair practices and frauds > False financial statements (20-447)
    • State regulation > Unfair practices and frauds > Unfair discrimination (20-448)
    • State regulation > Unfair practices and frauds > Gender discrimination (Rule R20-6-207)
    • State regulation > Unfair practices and frauds > Rebating (20-451)
    • State regulation > Unfair practices and frauds > Prohibited inducements (20-452)
    • State regulation > Unfair practices and frauds > Fees (20-465)
    • State regulation > Unfair practices and frauds > Unfair claims settlement practices (20-461; Rule R20-6-801)
    • State regulation > Unfair practices and frauds > Claims payment (20-462)
    • State regulation > Unfair practices and frauds > Insurance fraud (20-463, 466–466.04)
    • Insurance information and privacy protection (20-2101–2122)
  • Federal Laws and Regulations
    • Fair Credit Reporting Act (15 USC 1681–1681d)
    • National Flood Insurance Program (NFIP)
    • Gramm-Leach-Bliley Act (20-2121; Public Law 106-102)
    • Prohibited Persons in Insurance (18 United States Code (USC) Sections 1033 and 1034) waiver
    • CAN-SPAM Act of 2003 (15 USC 7701; 18 USC 1037)
    • Telemarketing Sales Rule (16 CFR 310; 15 USC 6101–6108; A.R.S. 44-1282)
  • General Insurance Concepts
    • Risk
    • Risk > Methods of Handling Risk (e.g., Avoidance, Retention, Sharing, Reduction, Transfer)
    • Risk > Elements of Insurable Risks
    • Risk > Definitions (e.g., Risk, Hazard, Peril, Loss)
    • Classifications of Insurers
    • Classifications of Insurers > Mutual, Stock
    • Classifications of Insurers > Admitted, Non-Admitted
    • Classifications of Insurers > Foreign, Domestic, Alien
    • Elements of a Contract
    • Elements of a Contract > Consideration
    • Elements of a Contract > Competent Parties
    • Elements of a Contract > Legal Purpose
    • Elements of a Contract > Offer
    • Elements of a Contract > Acceptance
    • Authority and Powers of Producers - Definitions
    • Authority and Powers of Producers - Definitions > Express
    • Authority and Powers of Producers - Definitions > Implied
    • Authority and Powers of Producers - Definitions > Apparent
    • Authority and Powers of Producers - Definitions > The Law of Agency
    • Legal Interpretations Affecting Contracts
    • Legal Interpretations Affecting Contracts > Reasonable Expectations
    • Legal Interpretations Affecting Contracts > Indemnity
    • Legal Interpretations Affecting Contracts > Good Faith
    • Legal Interpretations Affecting Contracts > Fraud
    • Legal Interpretations Affecting Contracts > Warranties, Representations, Misrepresentations, and Concealment
  • Property and Casualty Insurance Basics
    • Insurable Interest
    • Liability
    • Liability > Absolute
    • Liability > Strict
    • Liability > Vicarious
    • Underwriting (Purpose, Process, Results)
    • Types of Hazards
    • Types of Hazards > Moral
    • Types of Hazards > Morale
    • Types of Hazards > Physical
    • Types of Perils
    • Types of Perils > Named
    • Types of Perils > Open
    • Types of Loss
    • Types of Loss > Direct
    • Types of Loss > Indirect
    • Loss Valuation
    • Loss Valuation > Actual Cash Value
    • Loss Valuation > Replacement Cost
    • Loss Valuation > Market Value
    • Loss Valuation > Agreed Value
    • Loss Valuation > Valued Policy
    • Loss Valuation > Functional Replacement Cost
    • Negligence
    • Negligence > Torts
    • Negligence > Elements of a Negligent Act
    • Negligence > Defense Against Negligence
    • Accident versus Occurrence
    • Policy Structure
    • Policy Structure > Declarations
    • Policy Structure > Definitions
    • Policy Structure > Insuring Agreement
    • Policy Structure > Additional/Supplementary Coverage
    • Policy Structure > Conditions
    • Policy Structure > Exclusions
    • Policy Structure > Endorsements
    • Policy Clauses
    • Policy Clauses > Insureds
    • Policy Clauses > Policy Period
    • Policy Clauses > Policy Territory
    • Policy Clauses > Cancellation and Non-Renewal
    • Policy Clauses > Deductibles
    • Policy Clauses > Other Insurance
    • Policy Clauses > Other Insurance > Nonconcurrency
    • Policy Clauses > Other Insurance > Primary and Excess
    • Policy Clauses > Other Insurance > Pro Rata
    • Policy Clauses > Other Insurance > Contribution by Equal Shares
    • Limits of Liability
    • Limits of Liability > Per Accident
    • Limits of Liability > Per Occurrence
    • Limits of Liability > Per Person
    • Limits of Liability > Aggregate
    • Limits of Liability > Split limits
    • Limits of Liability > Combined Single Limit
    • Coinsurance
    • Coinsurance > Purpose
    • Coinsurance > Definition
    • Coinsurance > Calculation
    • Coinsurance > Penalties
    • Coinsurance > Total versus Partial Loss
    • Specific, Scheduled, and Blanket Insurance
    • Vacant versus Unoccupied
    • Named Insured Provisions
    • Named Insured Provisions > First Named Insured versus Other Insureds
    • Named Insured Provisions > Duties After Loss
    • Named Insured Provisions > Assignment
    • Named Insured Provisions > Waiver of Rights
    • Insurer Provisions
    • Insurer Provisions > Liberalization
    • Insurer Provisions > Subrogation
    • Insurer Provisions > Claim Settlement Options
    • Insurer Provisions > Duty to Defend
    • Third-Party Provisions
    • Third-Party Provisions > Standard Mortgage Clause
    • Third-Party Provisions > Loss Payable Clause
    • Third-Party Provisions > No Benefit to the Bailee
  • Dwelling Policy Concepts
    • Purpose and Eligibility
    • Definitions
    • Perils Insured Against
    • Perils Insured Against > Basic
    • Perils Insured Against > Broad
    • Perils Insured Against > Special
    • Property Coverages
    • Property Coverages > Coverage A - Dwelling
    • Property Coverages > Coverage B - Other Structures
    • Property Coverages > Coverage C - Personal Property
    • Property Coverages > Coverage D - Fair Rental Value
    • Property Coverages > Coverage E - Additional Living Expenses
    • Property Coverages > Other Coverages
    • Personal Liability Supplement
    • Personal Liability Supplement > Coverage L - Personal Liability
    • Personal Liability Supplement > Coverage M - Medical Payments to Others
    • Dwelling Property Conditions
    • Dwelling Property Exclusions
    • Dwelling Policy Endorsements
  • Homeowners Policy Concepts
    • Definitions
    • Eligibility and Purpose
    • Homeowners Policy Coverage Forms
    • Homeowners Policy Coverage Forms > Broad (HO-2)
    • Homeowners Policy Coverage Forms > Special (HO-3)
    • Homeowners Policy Coverage Forms > Contents Broad (HO-4)
    • Homeowners Policy Coverage Forms > Comprehensive (HO-5)
    • Homeowners Policy Coverage Forms > Unit-Owners (HO-6)
    • Homeowners Policy Coverage Forms > Modified Coverages (HO-8)
    • Section I - Property Coverages
    • Section I - Property Coverages > Coverage A - Dwelling
    • Section I - Property Coverages > Coverage B - Other Structures
    • Section I - Property Coverages > Coverage C - Personal Property
    • Section I - Property Coverages > Coverage D - Loss of Use
    • Section I - Property Coverages > Additional Coverages
    • Section II - Liability Coverages
    • Section II - Liability Coverages > Coverage E - Personal Liability
    • Section II - Liability Coverages > Coverage F - Medical Payments to Others
    • Section II - Liability Coverages > Additional Coverages
    • Homeowners Policy Exclusions
    • Homeowners Policy Exclusions > Section I - Property Covered Exclusions
    • Homeowners Policy Exclusions > Section II - Liability Covered Exclusions
    • Homeowners Policy Conditions
    • Homeowners Policy Endorsements
    • Homeowners Policy Endorsements > Business Pursuits
    • Homeowners Policy Endorsements > Earthquake
    • Homeowners Policy Endorsements > Home Day Care
    • Homeowners Policy Endorsements > Personal Injury
    • Homeowners Policy Endorsements > Personal Property Replacement Cost
    • Homeowners Policy Endorsements > Watercraft
    • Scheduled Personal Property/Personal Articles Floater
  • Personal Automobile Policy
    • Definitions
    • Personal Injury Protection Definitions
    • Liability Coverage
    • Liability Coverage > Bodily Injury and Property Damage
    • Liability Coverage > Supplementary Payments
    • Liability Coverage > Exclusions
    • Liability Coverage > Liability Extension to Towed Vehicle
    • Medical Payments Coverage
    • Uninsured and Underinsured Motorists Coverage
    • Uninsured and Underinsured Motorists Coverage > Definitions
    • Uninsured and Underinsured Motorists Coverage > Bodily Injury
    • Uninsured and Underinsured Motorists Coverage > UM and UIM Rejection
    • Coverage for Damage to your Automobile
    • Coverage for Damage to your Automobile > Collision
    • Coverage for Damage to your Automobile > Other than Collision (Comprehensive)
    • Coverage for Damage to your Automobile > Deductibles
    • Coverage for Damage to your Automobile > Exclusions
    • Duties after an Accident or Loss
    • General Provisions
    • Endorsements
    • Endorsements > Towing and Labor Costs
    • Endorsements > Extended Non-Owned Coverage - Vehicles Furnished or Available for Regular Use
    • Endorsements > Joint Ownership Coverage
    • Endorsements > Rental Vehicle Coverage
  • Other Types of Personal Insurance
    • Personal Umbrella and Excess Policies
    • Mobile Home Policy (Insuring Agreement)
    • Earthquake Insurance (Insuring Agreement)
    • Earthquake Insurance (Insuring Agreement) > Deductible
    • Flood Insurance
    • Watercraft

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These are independent study questions, not actual examination items. For examination requirements and official information, view Arizona Examination for Personal Lines Insurance Producer details.