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Free General Insurance Concepts Practice Questions

Oregon Personal Lines exam — 58 practice questions.

Subtopics: Adverse selection, Reinsurance, Physical hazard, Risk avoidance, Pure risk, Law of large numbers, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, 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, 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, Conditional 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. The tendency of those most likely to have losses to be the most eager to buy insurance is known as:

Adverse selection

Adverse selection is the tendency of higher-risk individuals to seek or retain coverage more than average risks.

2. An insurer that wants to limit its exposure on a large risk may transfer part of that risk to another insurer through:

Reinsurance

Reinsurance lets an insurer transfer part of its risk to another insurer to limit its exposure.

3. A worn set of brakes on a vehicle is an example of a:

Physical hazard

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

4. A person who decides never to own a swimming pool in order to eliminate the chance of a pool-related loss is using risk:

Avoidance

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

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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.