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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

New Hampshire Personal Lines exam — 58 practice questions.

Subtopics: Risk avoidance, Risk retention, Physical hazard, Unilateral contract, Conditional contract, Personal contract, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Law of large numbers, 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, 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. Choosing never to operate a swimming pool to eliminate the chance of a pool-related loss is an example of risk:

Avoidance

Risk avoidance eliminates a risk entirely by not engaging in the activity that creates it.

2. Selecting a higher deductible so the insured pays more small losses themselves is a form of risk:

Retention

Retaining risk, such as through a higher deductible, means the insured assumes more of the potential loss.

3. Worn electrical wiring that increases the chance of a fire is an example of a:

Physical hazard

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

4. An insurance policy is a unilateral contract because:

Only the insurer makes a legally enforceable promise to pay covered losses

In a unilateral contract, only the insurer makes a legally enforceable promise once the premium is paid.

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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.