Free General Insurance Concepts Practice Questions
Arkansas Personal Lines exam — 72 practice questions.
Subtopics: Physical hazard, Loss exposure, Insurable risk, Risk reduction, Warranty, Negligence, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Law of large numbers, Risk avoidance, Risk retention, Risk transfer, Insurable interest, Indemnity, Elements of a contract, Contract of adhesion, Aleatory contract, Utmost good faith, Representation, Concealment, Express authority, Apparent authority, Implied authority, Stock vs mutual insurer, Domestic foreign alien, Admitted insurer, Estoppel, Adverse selection, Reinsurance, Underwriting, Loss ratio, Rate regulation goals, Reciprocal insurer, Lloyds of London, Risk retention group, Self-insurance, Surplus lines, Catastrophic risk, Frequency vs severity, Unilateral contract, Conditional contract, Personal contract, Waiver, Material misrepresentation, Fiduciary duty, Commingling, Agent vs broker, Rebating, Twisting, Coercion, Defamation, Unfair claims settlement, Indemnity and subrogation, Distribution systems, Insurer types, Insurer ratios, Loss reserves, Rate regulation, Earned and unearned premium, Lapse
Read the General Insurance Concepts study guide
Sample questions & answers
1. A physical hazard is:
A physical condition raising loss chances
A hazard is a circumstance that increases the probability or severity of a loss; a physical hazard is a tangible condition such as faulty wiring.
2. A loss exposure is best described as:
A situation that could cause a loss
An exposure is a risk of possible loss.
3. A characteristic of an ideally insurable risk is that the loss must be:
Definite, measurable, and accidental
An ideally insurable loss is definite, measurable, and accidental, among other characteristics.
4. Installing smoke detectors and deadbolt locks is an example of risk:
Reduction
Taking steps to lower the chance or severity of loss, such as installing smoke detectors, is risk reduction.
Practice: General Insurance Concepts
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
