Free General Insurance Concepts Practice Questions
Louisiana Personal Lines exam — 72 practice questions.
Subtopics: Law of large numbers, Adverse selection, Binder, Endorsement, Utmost good faith, Conditional contract, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Risk avoidance, Risk retention, Risk transfer, Insurable interest, Indemnity, Elements of a contract, Contract of adhesion, Aleatory contract, Representation, Concealment, Warranty, Express authority, Apparent authority, Implied authority, Stock vs mutual insurer, Domestic foreign alien, Admitted insurer, Estoppel, Reinsurance, Underwriting, Loss ratio, Rate regulation goals, Reciprocal insurer, Lloyds of London, Risk retention group, Self-insurance, Surplus lines, Catastrophic risk, Loss exposure, Frequency vs severity, Unilateral 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. Insurers can predict losses more accurately when they insure:
A large number of similar exposures
The law of large numbers improves loss prediction as the number of similar independent exposures increases.
2. The tendency of poorer-than-average risks to seek or retain insurance is called:
Adverse selection
Adverse selection is the inclination of higher-risk individuals to pursue insurance more than average risks.
3. A temporary contract providing coverage until the policy is issued is a:
Binder
A binder provides temporary insurance coverage until the formal policy is issued or the request is declined.
4. A written amendment that changes the terms of a property and casualty policy is a(n):
Endorsement
An endorsement is a written amendment that adds, removes, or changes coverage in a policy.
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.
