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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Georgia Personal Lines exam — 59 practice questions.

Subtopics: Risk transfer, Risk retention, Legal hazard, Stock insurer, Declarations, Exclusions, Endorsement, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, Risk avoidance, 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

Read the General Insurance Concepts study guide

Sample questions & answers

1. Buying insurance is an example of which risk management technique?

risk transfer

Insurance transfers the financial consequences of risk from the insured to the insurer.

2. Choosing a higher deductible to keep small losses yourself is an example of:

risk retention

Selecting a higher deductible is a form of risk retention, in which the insured keeps part of the loss exposure.

3. Court rulings or statutes that increase the size of liability awards create:

a legal hazard

A legal hazard arises when laws or court tendencies increase the frequency or severity of losses.

4. A stock insurance company is:

owned by stockholders who may receive taxable dividends

A stock insurer is owned by stockholders, who may receive taxable dividends from company profits.

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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.