Free General Insurance Concepts Practice Questions
Idaho Life exam — 78 practice questions.
Subtopics: Pure risk, Peril, Hazard, Law of large numbers, Adverse selection, Contract of adhesion, Aleatory contract, 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, Utmost good faith, Representations, Concealment, Pure vs speculative risk, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, 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 terms, pure risk refers to a situation involving:
Only the chance of loss or no loss with no chance of gain
Pure risk involves only the possibility of loss or no loss and is insurable, unlike speculative risk.
2. A peril is best defined as:
The cause of a loss, such as illness or accident
A peril is the actual cause of a loss, such as illness, accident, or fire.
3. A hazard is:
A condition that increases the likelihood or severity of a loss
A hazard is a condition that increases the chance or severity of a loss, as opposed to the peril that causes it.
4. Insurers rely on the law of large numbers to:
More accurately predict losses across a large group
The law of large numbers lets insurers predict losses more accurately as the number of similar exposure units grows.
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.
