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Free General Insurance Concepts Practice Questions

Montana Life, Accident & Health exam — 33 practice questions.

Subtopics: Moral hazard, Morale hazard, Risk avoidance, Contract elements, Conditional contract, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Unilateral contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing

Read the General Insurance Concepts study guide

Sample questions & answers

1. An insured who intentionally causes a loss to collect insurance illustrates a:

moral hazard

A moral hazard arises from dishonesty, such as intentionally causing a loss.

2. Carelessness or indifference to loss because one has insurance is best described as a:

morale hazard

A morale hazard is carelessness or indifference to loss because insurance exists.

3. Choosing not to engage in an activity at all in order to eliminate its risk is risk:

avoidance

Avoiding the activity entirely is risk avoidance.

4. Which of the following is a required element of a valid insurance contract?

legal purpose and competent parties

A valid contract requires legal purpose and competent parties, among other elements.

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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.