1. Exam Prep
  2. Alabama
  3. Personal Lines
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Alabama Personal Lines exam — 58 practice questions.

Subtopics: Indemnity principle, Insurable interest (property), Peril vs hazard, Subrogation, Proximate cause, Concealment, 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, 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, Fundamental vs particular 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

Read the General Insurance Concepts study guide

Sample questions & answers

1. The principle of indemnity in property insurance means the insured should:

Be restored to their pre-loss financial condition, no more

Indemnity restores the insured to the pre-loss financial position without allowing a gain.

2. For property insurance, insurable interest must exist:

At the time of the loss

In property insurance, insurable interest must exist at the time of loss to collect.

3. In property insurance, a peril is:

The cause of a loss, such as fire or windstorm

A peril is the cause of loss (e.g., fire), while a hazard is a condition that increases the chance or severity.

4. After paying a covered loss, an insurer's right to recover from the responsible third party is:

Subrogation

Subrogation lets the insurer pursue the at-fault party to recover amounts it paid the insured.

All Personal Lines topics

Practice: General Insurance Concepts

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

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.