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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Delaware Property & Casualty exam — 39 practice questions.

Subtopics: Self-insurance, Moral hazard, Morale hazard, Implied authority, Personal contract, Loss exposure, Handling risk, Insurer classifications, Adverse selection, Elements of a contract, Insurable risk, Hazards, Definitions, Authority of producers, Legal interpretations, Law of large numbers, Principle of indemnity, Utmost good faith, Concealment, Warranty, Waiver and estoppel, Subrogation, Reinsurance, Admitted vs nonadmitted, Domestic foreign alien, Aleatory contract, Contract of adhesion, Unilateral contract, Apparent authority, Rebating, Risk pooling, Pro-rata cancellation

Read the General Insurance Concepts study guide

Sample questions & answers

1. A large employer that sets aside its own funds to pay anticipated losses rather than buying coverage is using:

Self-insurance

Self-insurance is a planned retention in which an organization funds its own anticipated losses.

2. An insured who intentionally causes or exaggerates a loss to collect insurance illustrates a:

Moral hazard

A moral hazard is dishonesty or a character flaw that increases the chance of a loss, such as intentionally causing one.

3. An insured who becomes careless about protecting property simply because it is insured demonstrates a:

Morale hazard

A morale hazard is an attitude of carelessness or indifference to loss because insurance is in place.

4. Authority that is not written but is reasonably necessary for a producer to carry out express duties is:

Implied authority

Implied authority is the power reasonably necessary to carry out the duties expressly granted to the producer.

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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.