Free General Insurance Concepts Practice Questions
Texas Personal Lines Property & Casualty exam (series InsTX-PersPC55) — 66 practice questions.
Subtopics: Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, Risk avoidance, Risk retention, 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, 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. Only which type of risk is insurable?
Pure risk, with no chance of gain
Insurance covers pure risk - the chance of loss or no loss - not speculative risk, which includes a chance of gain.
2. A condition that increases the likelihood or severity of a loss is called a:
Hazard
A hazard is a condition that increases the chance or severity of a loss; perils are the actual causes of loss.
3. In insurance terms, a peril is:
The cause of a loss, such as fire or theft
A peril is the cause of a loss (e.g., fire, windstorm, theft) against which insurance provides protection.
4. A moral hazard refers to:
Dishonest tendencies that increase the chance of loss
Moral hazard arises from a person's dishonesty or character that increases the likelihood of loss or fraud.
All Personal Lines Property & Casualty topics
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.
