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Free General Insurance Concepts Practice Questions

Hawaii Personal Lines exam — 58 practice questions.

Subtopics: Risk reduction, Insurable risk, Physical hazard, Moral hazard, Morale hazard, Proximate cause, Pure vs speculative risk, Hazard, Peril, 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, 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. Installing smoke detectors and deadbolt locks to lessen potential losses is an example of risk:

Reduction

Risk reduction (loss control) uses measures that lower the frequency or severity of potential losses.

2. An ideally insurable risk should generally be:

Definite, measurable, and due to chance

An insurable risk should involve losses that are definite, measurable, fortuitous, and not catastrophic to all insureds at once.

3. A frayed electrical wire in a home is an example of a:

Physical hazard

A physical hazard is a tangible condition, such as faulty wiring, that increases the chance of loss.

4. An insured who intentionally causes a loss in order to collect insurance illustrates:

Moral hazard

Moral hazard is the increased chance of loss arising from a person's dishonesty, such as intentionally causing a loss.

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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.