The Personal Lines Broker/Agent examination focuses on basic knowledge of insurance and insurance laws. The intent is to make sure you have a sufficient understanding of the personal lines concepts to transact insurance with the public.
In most states, you will need a passing score of 70%. That’s basically a “C-“. Don’t take this exam lightly. The exam writers do a pretty good job making the exam a bit “tricky.” Double negatives are common and they use a thesaurus quite frequently to throw you off.
Fear not. The exam is pass-able. When you register for my study materials, be thorough. Follow the instructions on your “Welcome” email and reach out if you have any questions.
The Personal Lines Only Exam Curriculum is designed for individuals seeking a license to sell personal lines insurance policies, which cover personal risks such as auto, home, and personal liability. This curriculum is more focused than the full Property and Casualty curriculum and excludes commercial insurance topics.
Personal Lines Insurance Exam Curriculum
1. General Insurance Principles
- Insurance Basics
- Risk management: Definition, types of risks (pure vs. speculative), and methods of handling risk
- Elements of an insurance contract: Offer, acceptance, consideration, legal purpose, and competency
- Characteristics of insurance contracts: Adhesion, aleatory, unilateral, and conditional
- Key Insurance Terms
- Indemnity, subrogation, proximate cause, actual cash value (ACV), replacement cost
- Named perils vs. open perils
- The Insurance Market
- Types of insurers: Stock, mutual, reciprocal, and fraternal insurers
- Private vs. government insurance programs
- Admitted vs. non-admitted carriers
- Regulation of Insurance
- State regulation: Role of the Department of Insurance (DOI)
- Federal regulations impacting personal lines (e.g., National Flood Insurance Program)
- Unfair trade practices and consumer protections
2. Homeowners Insurance
- Policy Types
- HO-2: Broad form
- HO-3: Special form
- HO-4: Renters insurance
- HO-5: Comprehensive form
- HO-6: Condo owners
- HO-8: Modified coverage form for older homes
- Policy Structure
- Declarations, insuring agreement, definitions, conditions, and exclusions
- Key Coverages
- Coverage A: Dwelling
- Coverage B: Other structures
- Coverage C: Personal property
- Coverage D: Loss of use
- Coverage E: Personal liability
- Coverage F: Medical payments to others
- Additional Coverages
- Debris removal, ordinance or law, personal property replacement cost
- Policy Endorsements
- Scheduled personal property
- Water backup and sump pump overflow
- Earthquake and flood endorsements
3. Auto Insurance
- Personal Auto Policy (PAP)
- Policy structure: Declarations, insuring agreement, conditions, exclusions
- Key Coverages
- Liability: Bodily injury (BI) and property damage (PD)
- Medical payments or personal injury protection (PIP)
- Uninsured/underinsured motorist (UM/UIM)
- Physical damage: Comprehensive and collision
- Endorsements
- Towing and labor
- Rental reimbursement
- Custom equipment
- State-Specific Minimum Liability Limits
- Understanding the required liability limits in each state
- No-Fault vs. Tort Systems
- States with no-fault laws and PIP requirements
4. Dwelling Insurance
- Policy Forms
- DP-1: Basic form
- DP-2: Broad form
- DP-3: Special form
- Key Coverages
- Coverage A: Dwelling
- Coverage B: Other structures
- Coverage C: Personal property
- Coverage D: Fair rental value
- Coverage E: Additional living expenses
- Endorsements and Exclusions
- Theft coverage
- Liability coverage add-ons
5. Personal Umbrella Insurance
- Purpose and Function
- Excess liability coverage beyond auto and home insurance limits
- Eligibility
- Requirements for underlying policies
- Policy Features
- Coverage for personal injury, libel, and slander
- Worldwide coverage for personal liability
6. Personal Inland Marine Insurance
- Coverage Overview
- Personal articles floater
- Coverage for high-value items (e.g., jewelry, art, collectibles)
- Policy Provisions
- Worldwide coverage
- Valuation: Agreed value, actual cash value, replacement cost
7. Ethics and Market Conduct
- Ethical Responsibilities
- Suitability and needs analysis
- Duty of care in policy recommendations
- Prohibited Practices
- Twisting, rebating, misrepresentation
- Consumer Protections
- Privacy laws, claims handling practices, and complaint resolution
8. State-Specific Laws and Regulations
- Licensing Requirements
- Pre-licensing education hours (varies by state, typically 20–40 hours)
- Application process and examination
- Continuing Education (CE)
- CE mandates (e.g., 24 hours every two years, including ethics training)
- State-Specific Policy Features
- Free-look periods, cancellation rules, mandated coverages