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Free General Insurance Concepts Practice Questions

Kansas Personal Lines exam — 58 practice questions.

Subtopics: Proximate cause, Moral hazard, Unilateral contract, Waiver, Estoppel, Salvage, Pure vs speculative risk, Hazard, Peril, 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, Concealment, Warranty, Express authority, Apparent authority, Implied authority, Stock vs mutual insurer, Domestic foreign alien, Admitted insurer, 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, Conditional contract, Personal contract, Material misrepresentation, Fiduciary duty, Commingling, Agent vs broker, Rebating, Twisting, Coercion, Defamation, Unfair claims settlement

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Sample questions & answers

1. Proximate cause refers to:

The primary cause that sets in motion the chain of events leading to a loss

Proximate cause is the primary cause that starts the unbroken chain of events resulting in a loss.

2. A moral hazard is best described as:

A dishonest tendency, such as exaggerating a claim, that increases the chance or size of a loss

A moral hazard is a dishonest tendency, such as inflating a claim, that increases the likelihood or size of a loss.

3. An insurance policy is a unilateral contract because:

Only the insurer makes a legally enforceable promise

In a unilateral contract, only the insurer makes a legally enforceable promise to pay covered losses.

4. A waiver is best defined as:

The voluntary giving up of a known right

A waiver is the voluntary relinquishment of a known legal right.

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Practice: General Insurance Concepts

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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.