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Free General Insurance Concepts Practice Questions

Nebraska Personal Lines exam — 58 practice questions.

Subtopics: Speculative risk, Short-rate cancellation, Pro rata cancellation, Hold harmless, Additional insured, Loss exposure, Pure vs speculative risk, Hazard, Peril, Moral hazard, 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, 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, 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. A risk involving the chance of loss, no change, or gain, such as gambling, is a:

Speculative risk

Speculative risk includes the chance of gain and is not insurable, unlike pure risk.

2. When an insured cancels a policy midterm, the insurer may return unearned premium while retaining a penalty, called:

Short-rate cancellation

Short-rate cancellation returns less than the full unearned premium because a penalty is retained when the insured cancels.

3. When the insurer cancels a policy midterm, unearned premium is generally returned on a:

Pro rata basis

When the insurer cancels, it returns the full unearned premium on a pro rata basis.

4. A contract clause in which one party assumes the liability of another is a:

Hold harmless (indemnification) agreement

A hold harmless or indemnification agreement transfers one party's liability to another by contract.

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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.