Free General Insurance Concepts Practice Questions
Arizona Life exam (series 13-31) — 78 practice questions.
Subtopics: Risk, Peril, Hazard, Adverse selection, Law of large numbers, Representations, Utmost good faith, Definition of risk, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Consideration, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Indemnity, Concealment, Pure vs speculative risk, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Aleatory contract, Contract of adhesion, Unilateral contract, Conditional contract, Warranty, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance, Exposure, Loss, Risk avoidance, Risk reduction, Risk sharing, Speculative risk, Homogeneous exposure units, Catastrophic loss, Domestic insurer, Alien insurer, Mutual dividends, Assessment mutual, Lloyd's, Government insurers, Insurer ratings, Captive agency system, Independent agency, Direct response, Managing general agent, Insurer as principal, Presumption of agency, Errors and omissions, Insurer consideration, Reasonable expectations, Fraud, Personal contract, Valued contract
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Sample questions & answers
1. In insurance, pure risk refers to a situation involving:
Only the chance of loss or no loss
Pure risk involves only loss or no loss and is insurable; speculative risk includes a chance of gain.
2. A peril is best defined as:
The cause of a loss
A peril is the cause of loss; a hazard increases the chance or severity of loss.
3. A hazard is best described as:
A condition that increases the chance of loss
Hazards may be physical, moral or morale.
4. Adverse selection refers to the tendency of:
Higher-risk people to seek more coverage
Underwriting and risk classification counter adverse selection.
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.
