Free General Insurance Concepts Practice Questions
Arizona Casualty exam (series 13-43) — 87 practice questions.
Subtopics: Representations, Misrepresentation effect, Pure risk, Hazard, Peril, Methods of handling risk, Retention, Insurable interest, Stock insurer, Reciprocal, Admitted insurer, Foreign insurer, Elements of contract, Apparent authority, Express authority, Implied authority, Indemnity, Subrogation, Utmost good faith, Warranty, Representation, Concealment, Adhesion, Aleatory, Waiver, Estoppel, Moral hazard, Law of large numbers, Mutual insurer, Domestic insurer, Alien insurer, Surplus lines, Adverse selection, Physical hazard, Morale hazard, Speculative risk, Risk sharing, Risk reduction, Reinsurance, Fortuitous loss, Insurable risk characteristics, Fiduciary duty, Binder, Unilateral contract, Conditional contract, Personal contract, Declarations, Insuring agreement, Exclusions, Conditions, Endorsement, Material fact, Misrepresentation, Parol evidence rule, Loss exposure, Risk avoidance, Noninsurance transfer, Self-insurance, Captive insurer, Lloyd's, Residual markets, Underwriting sources, Rating methods, Premium components, Premium audit, Producer types, Direct writers, Managing general agent, Binding authority, Doctrine of reasonable expectations, Insurable interest timing, Insurance definition, Loss ratio, Combined ratio, Adjusters, Policy structure, Definitions, Monoline vs package, Interline endorsements, Insurer types, Insurance principles
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Sample questions & answers
1. In Arizona, statements made by an applicant in an application for insurance are deemed to be:
Representations, not warranties
All statements in an application are representations; a misstatement prevents recovery only if fraudulent, material, or the insurer in good faith would not have issued the coverage.
2. Under Arizona law, an incorrect statement on an application does NOT prevent recovery under the policy unless it is:
Fraudulent, material, or decisive to the insurer's decision
Misrepresentations and incorrect statements bar recovery only if fraudulent, material to the acceptance of the risk or hazard, or if the insurer would not have issued the coverage had it known the truth.
3. Insurance generally covers only pure risk. Pure risk is a situation that involves:
Only the chance of loss or no loss
Only pure risk (no chance of gain) is insurable; speculative risk involves the possibility of gain.
4. A condition that increases the chance or severity of a loss is a:
Hazard
A hazard increases the likelihood or severity of loss; the peril is the actual cause of loss.
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.
