Free General Insurance Concepts Practice Questions
Arizona Property exam (series 13-42) — 79 practice questions.
Subtopics: Representations, Misrepresentation effect, Pure vs speculative risk, Hazard types, Moral hazard, Law of large numbers, Insurable interest property, Methods of handling risk, Risk avoidance, Stock insurer, Reciprocal insurer, Admitted vs non-admitted, Alien insurer, Reinsurance, Elements of a contract, Express authority, Implied authority, Indemnity, Subrogation, Utmost good faith, Warranty, Concealment, Estoppel, Aleatory, Contract of adhesion, Unilateral contract, Conditional contract, Material misrepresentation, Fraud, Waiver, Domestic insurer, Foreign insurer, Mutual insurer, Lloyds association, Risk pooling, Risk retention, Risk transfer, Fundamental vs particular risk, Adverse selection, Peril definition, Morale hazard, Legal hazard, Binder, Apparent authority, Fiduciary responsibility, Self-insurance, Pro-rata cancellation, Insurable risk elements, Insurable risk - catastrophic, Large homogeneous group, Exposure, Peril vs hazard, Moral hazard example, Loss prevention vs reduction, Treaty reinsurance, Facultative reinsurance, Ceding company, Retrocession, Assessment insurers, Captive insurer, Government insurer, Mutual dividends, Independent agent, Exclusive agent, Broker, Managing general agent, Public adjuster, Producer E&O, Representation vs warranty, Absolute liability, Loss ratio, Combined ratio, Class rating, Judgment rating, Earned premium, Binder form, Contract characteristics, Hazards and perils, Insurer types
Read the General Insurance Concepts study guide
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 is designed to cover:
Pure risk, where there is only a chance of loss
Only pure risk (loss or no loss, no chance of gain) is insurable; speculative risk involves a chance of gain.
4. A physical hazard is:
A tangible condition, such as faulty wiring, that raises the chance of loss
A physical hazard is a tangible condition (e.g., faulty wiring) that increases the likelihood or severity 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.
