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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Nevada Accident & Health exam — 45 practice questions.

Subtopics: Indemnity, Utmost good faith, Warranty, Risk retention, Mutual insurer, Risk definition, Morale hazard, Peril, Risk transfer, Adverse selection, Stock insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Representations, Concealment, Aleatory contract, Contract of adhesion, Pure risk, Speculative risk, Law of large numbers, Physical hazard, Moral hazard, Implied authority, Fiduciary duty, Misrepresentation, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Non-admitted insurer, Alien insurer, Unilateral contract, Conditional contract, Offer and acceptance, Insurable interest

Read the General Insurance Concepts study guide

Sample questions & answers

1. The principle that insurance should restore an insured to the pre-loss financial position without allowing a profit is the principle of:

Indemnity

The principle of indemnity seeks to make the insured whole after a loss without permitting a financial gain.

2. An insurance contract is described as one of utmost good faith because:

Both parties rely on the honesty and full disclosure of the other

Insurance contracts assume utmost good faith, with both the applicant and insurer relying on each other's honesty and full disclosure.

3. A statement guaranteed to be true in all respects, which if untrue may void the contract, is a:

Warranty

A warranty is a guaranteed statement that must be literally true; its breach can void the contract, unlike a representation believed true.

4. A business that sets aside its own funds to pay for certain losses instead of buying insurance is using risk:

Retention

Risk retention means keeping the financial responsibility for a loss, such as through self-funding rather than transferring it to an insurer.

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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.