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Free General Insurance Concepts Practice Questions

Delaware Personal Lines exam — 58 practice questions.

Subtopics: Risk avoidance, Risk reduction, Risk retention, Speculative risk, Loss frequency, Insurable risk, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, 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, 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

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Sample questions & answers

1. Choosing not to engage in an activity at all in order to eliminate its risk entirely is risk:

Avoidance

Risk avoidance eliminates a risk by declining to undertake the activity that creates it.

2. Installing smoke detectors and deadbolt locks to lessen the chance or size of a loss is an example of risk:

Reduction

Risk reduction (loss control) lowers the frequency or severity of potential losses through preventive measures.

3. A homeowner who selects a higher deductible and plans to pay small losses out of pocket is using risk:

Retention

Risk retention means keeping the financial responsibility for certain losses rather than transferring them.

4. Unlike pure risk, speculative risk involves:

The chance of either loss or gain and is generally not insurable

Speculative risk carries the possibility of gain as well as loss and is generally not insurable, unlike pure risk.

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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.