Free General Insurance Concepts Practice Questions
Maryland Personal Lines exam (series 20-29) — 72 practice questions.
Subtopics: Risk retention, Risk avoidance, Reinsurance, Offer and acceptance, Legal purpose, Competent parties, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, Risk transfer, Insurable interest, Indemnity, Elements of a contract, Contract of adhesion, Aleatory contract, Utmost good faith, Representation, Concealment, Warranty, Express authority, Apparent authority, Implied authority, Stock vs mutual insurer, Domestic foreign alien, Admitted insurer, Estoppel, Adverse selection, 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, Conditional 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. Choosing a deductible or self-insuring part of a loss is an example of:
Risk retention
Risk retention means keeping all or part of a risk yourself, as with deductibles or self-insurance.
2. Deciding not to engage in an activity at all to eliminate its risk is:
Risk avoidance
Risk avoidance eliminates the possibility of a particular loss by not undertaking the activity that creates it.
3. Reinsurance can best be described as:
Coverage an insurer buys to transfer part of its own risk
Reinsurance is coverage an insurer buys from another insurer to spread or limit its own exposure to loss.
4. In forming an insurance contract, the applicant's submission of an application with premium generally represents:
The offer, which the insurer may accept
Submitting a completed application with the initial premium is generally the offer; the insurer's issuance of the policy is the acceptance.
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.
