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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Rhode Island Property & Casualty exam — 37 practice questions.

Subtopics: Moral hazard, Material misrepresentation, Waiver, Contract elements, Handling risk, Insurer classifications, Adverse selection, Elements of a contract, Insurable risk, Hazards, Definitions, Authority of producers, Legal interpretations, Law of large numbers, Principle of indemnity, Utmost good faith, Concealment, Warranty, Waiver and estoppel, Subrogation, Reinsurance, Admitted vs nonadmitted, Domestic foreign alien, Aleatory contract, Contract of adhesion, Unilateral contract, Apparent authority, Rebating, Risk pooling, Pro-rata cancellation

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Sample questions & answers

1. An insured who intentionally exaggerates a claim to collect more money illustrates a:

Moral hazard

A moral hazard arises from dishonesty or a tendency to cause or exaggerate a loss for financial gain.

2. A false statement on an application that is important enough to affect the insurer's decision is a:

Material misrepresentation

A material misrepresentation is a false statement significant enough to affect the insurer's underwriting decision and may void coverage.

3. When an insurer voluntarily gives up a known right under the policy, this is a:

Waiver

A waiver is the voluntary relinquishment of a known right; estoppel may then prevent the insurer from later asserting that right.

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

Consideration exchanged by the parties

A valid contract requires offer and acceptance, consideration, competent parties, and a legal purpose.

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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.