Free General Insurance Concepts Practice Questions
Washington Life exam — 83 practice questions.
Subtopics: Indemnity, Utmost good faith, Adhesion, Aleatory, Warranty vs representation, Concealment, Law of large numbers, Consideration, Pure risk, Estoppel, Producer authority, Risk management, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Representations, Pure vs speculative risk, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Aleatory contract, Contract of adhesion, Unilateral contract, Conditional contract, Warranty, Waiver, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance, Exposure, Loss, Risk avoidance, Risk reduction, Risk sharing, Speculative risk, Homogeneous exposure units, Catastrophic loss, Domestic insurer, Alien insurer, Mutual dividends, Assessment mutual, Lloyd's, Government insurers, Insurer ratings, Captive agency system, Independent agency, Direct response, Managing general agent, Insurer as principal, Presumption of agency, Errors and omissions, Insurer consideration, Reasonable expectations, Fraud, Personal contract, Valued contract
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Sample questions & answers
1. The principle that a person should not profit from insurance but be restored to their prior position is:
Indemnity
Indemnity restores the insured to the financial position held before the loss, without allowing a profit.
2. Insurance contracts are said to require utmost good faith, meaning:
Both parties rely on each other's honest disclosures
Utmost good faith means both parties depend on the honesty and full disclosure of the other in forming the contract.
3. Why is a life insurance policy considered a contract of adhesion?
The insurer writes it and the applicant takes it or leaves it
In a contract of adhesion one party drafts the terms and the other accepts or rejects them, so ambiguities are construed against the insurer.
4. Insurance contracts are aleatory, meaning:
The exchange of value may be unequal depending on chance
An aleatory contract involves an exchange of unequal amounts depending on an uncertain future event.
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.
