Free General Insurance Concepts Practice Questions
Maine Personal Lines exam (series 12-ME-55) — 72 practice questions.
Subtopics: Speculative risk, Physical hazard, Risk avoidance, Risk reduction, Utmost good faith, Estoppel, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Law of large numbers, 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, Adverse selection, 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, 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. A speculative risk, such as a business venture or gambling, differs from a pure risk because it involves:
A chance of loss or gain; not insurable
Speculative risk carries the possibility of gain as well as loss and is generally not insurable.
2. An icy sidewalk that increases the chance of a fall is an example of a:
Physical hazard
A physical hazard is a tangible condition that increases the likelihood or severity of a loss.
3. Deciding never to operate a trampoline business in order to eliminate that liability entirely is an example of risk:
Avoidance
Risk avoidance eliminates a risk completely by choosing not to engage in the activity that creates it.
4. Installing smoke detectors and a sprinkler system to lessen fire damage is an example of risk:
Reduction
Risk reduction lowers the frequency or severity of potential losses through loss-control measures.
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.
