Free General Insurance Concepts Practice Questions
Maryland Accident & Health exam — 70 practice questions.
Subtopics: Pure risk, Law of large numbers, Moral hazard, Peril, Risk transfer, Risk definition, Morale hazard, Adverse selection, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Indemnity, Utmost good faith, Representations, Concealment, Aleatory contract, Contract of adhesion, Speculative risk, Physical hazard, Implied authority, Fiduciary duty, Warranty, Misrepresentation, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Non-admitted insurer, Alien insurer, Unilateral contract, Conditional contract, Offer and acceptance, Insurable interest, Methods of handling risk, Insurable risk, Types of insurers, Insurer financial strength, Distribution systems, Agency law, Contract characteristics, Contract interpretation, Contract elements, Fraud
Read the General Insurance Concepts study guide
Sample questions & answers
1. Which type of risk is insurable?
Pure risk
Only pure risk, involving the chance of loss or no loss (no chance of gain), is insurable; speculative risk is not.
2. The law of large numbers helps insurers because as the number of similar exposures increases:
Predicted losses become more accurate
The law of large numbers states that as the pool of similar exposures grows, actual loss experience more closely matches predicted losses.
3. A moral hazard is best described as:
Dishonesty that increases the chance of loss
Moral hazard refers to dishonesty or character traits (such as fraud tendencies) that increase the likelihood or size of a loss.
4. A peril is best defined as:
The cause of a loss
A peril is the direct cause of loss (for example, illness or accident); a hazard is a condition that increases the chance 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.
