Free General Insurance Concepts Practice Questions
Virginia Personal Lines exam (series 11-07) — 72 practice questions.
Subtopics: Insurable risk, Adhesion, Utmost good faith, Moral hazard, Law of large numbers, Risk transfer, Pure vs speculative risk, Hazard, Peril, Morale hazard, Physical hazard, Risk avoidance, Risk retention, 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, 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. Which type of risk is generally insurable?
Pure risk
Insurance covers pure risks involving only the chance of loss or no loss.
2. Because policies are contracts of adhesion, ambiguous terms are interpreted:
Against the insurer that drafted them
Courts construe ambiguities against the drafting insurer.
3. Utmost good faith requires that:
Both parties be honest and disclose material facts
Both parties must act honestly and disclose material facts.
4. A Virginia homeowner inflates a theft claim to cover his deductible. This illustrates:
Moral hazard
Moral hazard is dishonesty that increases the chance or size of a loss; morale hazard is carelessness or indifference.
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.
