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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Louisiana Personal Lines exam — 58 practice questions.

Subtopics: Law of large numbers, Adverse selection, Binder, Endorsement, Utmost good faith, Conditional contract, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Risk avoidance, Risk retention, Risk transfer, Insurable interest, Indemnity, Elements of a contract, Contract of adhesion, Aleatory contract, Representation, Concealment, Warranty, Express authority, Apparent authority, Implied authority, Stock vs mutual insurer, Domestic foreign alien, Admitted insurer, Estoppel, 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, 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. Insurers can predict losses more accurately when they insure:

A large number of similar exposures

The law of large numbers improves loss prediction as the number of similar independent exposures increases.

2. The tendency of poorer-than-average risks to seek or retain insurance is called:

Adverse selection

Adverse selection is the inclination of higher-risk individuals to pursue insurance more than average risks.

3. A temporary contract providing coverage until the policy is issued is a:

Binder

A binder provides temporary insurance coverage until the formal policy is issued or the request is declined.

4. A written amendment that changes the terms of a property and casualty policy is a(n):

Endorsement

An endorsement is a written amendment that adds, removes, or changes coverage in a policy.

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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 Pennsylvania Insurance Department and the exam administrator before relying on it.