Free General Insurance Concepts Practice Questions
Nebraska Life, Accident & Health exam (series 13-03) — 61 practice questions.
Subtopics: Moral hazard, Morale hazard, Physical hazard, Risk pooling, 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. A dishonest tendency, such as an insured's history of fraud, that increases the chance of loss is a:
Moral hazard
A moral hazard arises from dishonesty or a tendency toward fraud that increases the likelihood of loss.
2. An attitude of carelessness because insurance is present, increasing the chance of loss, is a:
Morale hazard
A morale hazard is indifference to loss because the insured knows insurance will respond.
3. An icy sidewalk that increases the chance of a slip-and-fall loss is an example of a:
Physical hazard
A physical hazard is a tangible condition, such as an icy walk, that increases the chance or severity of loss.
4. Spreading the losses of a few among many similar exposures reflects the principle of:
Risk pooling
Insurance relies on pooling, in which the losses of a few are shared among many similar exposures.
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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.
