Arizona Property & Casualty Insurance License Exam — All Questions

What are Arizona's minimum auto liability limits for bodily injury (per person / per accident) and property damage?

• a.$10,000 / $20,000 / $10,000
• b.$25,000 / $50,000 / $15,000✓
• c.$100,000 / $300,000 / $50,000
• d.There is no minimum; auto liability coverage is optional

Under A.R.S. 28-4009 (limits for policies issued on or after July 1, 2020), Arizona's minimum auto liability limits are $25,000 per person and $50,000 per accident for bodily injury, plus $15,000 for property damage (written 25/50/15). Always verify current figures with the Arizona Department of Insurance and Financial Institutions (DIFI).

For settling auto injury claims, Arizona follows which system?

• a.A tort ('at-fault') system in which the at-fault driver's liability coverage pays the other party✓
• b.A pure no-fault system in which each driver's own insurer always pays regardless of fault
• c.A system with no financial-responsibility requirement of any kind
• d.A federal single-payer auto injury system

Arizona is a tort ('at-fault') state, not a no-fault state; the at-fault driver's liability coverage responds to the injured party's claim. This determines how injury claims are paid in Arizona.

Under Arizona law, when an insurer cancels or does not renew a personal auto or homeowners policy, it must generally:

• a.Give no notice, because policies simply end at expiration
• b.Refund triple the premium as a statutory penalty
• c.Provide the policyholder advance written notice stating the reason, within the period fixed by state law✓
• d.Obtain the policyholder's written consent before it may nonrenew

Arizona regulates midterm cancellation and nonrenewal of personal-lines policies. Insurers must give advance written notice stating the reason within the number of days set by state law (shorter for nonpayment, longer for other reasons). Verify the exact notice periods with the Arizona Department of Insurance and Financial Institutions (DIFI).

A property owner in Arizona needs coverage on a one-to-four-family dwelling that is rented to tenants (not owner-occupied). Which policy is typically appropriate?

• a.An HO-3 homeowners policy, which fits any dwelling
• b.A Dwelling (DP) policy, which is designed for rental or non-owner-occupied dwellings✓
• c.A personal auto policy endorsement
• d.A commercial crime policy

Homeowners (HO) forms require owner-occupancy. For a rental or non-owner-occupied dwelling, a Dwelling Property (DP) policy is the standard product in Arizona and nationwide. This national concept is applied to Arizona risks on the exam.