Free General Insurance Concepts Practice Questions
Oregon Life, Accident & Health exam (series 12-03) — 60 practice questions.
Subtopics: Morale hazard, Insurable risk, Conditional contract, Risk retention, Handling 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 becomes careless about safety simply because they have insurance illustrates a:
Morale hazard
A morale hazard is an attitude of carelessness arising from the existence of insurance.
2. For a risk to be considered insurable, the loss should generally be:
Definite, measurable, and due to chance
Insurable risks generally involve losses that are definite, measurable, fortuitous, and predictable in the aggregate.
3. An insurance policy is a conditional contract because:
Conditions must be met for payment
A conditional contract requires that specified conditions, such as paying premiums and filing proof of loss, be met for the insurer to pay.
4. A business that chooses to set aside its own funds to pay for certain losses rather than buying coverage is using risk:
Retention
Retention is handling risk by keeping it and funding losses internally rather than transferring it to an insurer.
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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.
