Free General Insurance Concepts Practice Questions
Montana Life, Accident & Health exam — 61 practice questions.
Subtopics: Moral hazard, Morale hazard, Risk avoidance, Contract elements, Conditional contract, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Unilateral contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing, Competent parties, Warranties, Material misrepresentation, Waiver, Parol evidence, Implied authority, Law of agency, Pure risk, Speculative risk, Risk sharing, Risk reduction, Fraternal benefit society, Insurer financial strength, Producers, Contract characteristics
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Sample questions & answers
1. An insured who intentionally causes a loss to collect insurance illustrates a:
moral hazard
A moral hazard arises from dishonesty, such as intentionally causing a loss.
2. Carelessness or indifference to loss because one has insurance is best described as a:
morale hazard
A morale hazard is carelessness or indifference to loss because insurance exists.
3. Choosing not to engage in an activity at all in order to eliminate its risk is risk:
avoidance
Avoiding the activity entirely is risk avoidance.
4. Which of the following is a required element of a valid insurance contract?
legal purpose and competent parties
A valid contract requires legal purpose and competent parties, among other elements.
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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.
