Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with flashcards and multiple choice questions, each offering hints and explanations. Equip yourself for your test confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following statements about insurable interest is FALSE?

Purchasing an insurance policy on your home helps protect your insurable interest in a home.
When a renter leases your house, your insurable interest in the home remains.
Maintaining property values allows your neighbor to have an insurable interest in your house.
Insurable interest reduces the incentive for someone to cause damages intentionally to insured property.

The correct answer is: Maintaining property values allows your neighbor to have an insurable interest in your house.

Insurable interest is the financial or legal interest that a person has in a property or person that is insured. This interest must exist at the time of the insurance policy being taken out and at the time of the insured event. A neighbor would not have a legal or financial interest in your house, therefore they would not have insurable interest in it. This makes statement C false. Statements A, B, and D are all true. Purchasing an insurance policy on your home ensures that you have financial protection in case of any damage or loss to your property. When a renter leases your house, your insurable interest in the home remains as you still hold legal ownership of the property. Insurable interest also helps to reduce the incentive for someone to cause damages intentionally to insured property as the policy holder would suffer financial loss.