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  3. Property & Casualty
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

South Dakota Property & Casualty exam — 39 practice questions.

Subtopics: Physical hazard, Morale hazard, Reinsurance, Risk transfer, Representation, Open policy, 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, Admitted vs nonadmitted, Domestic foreign alien, Aleatory contract, Contract of adhesion, Unilateral contract, Apparent authority, Rebating, Risk pooling, Pro-rata cancellation

Read the General Insurance Concepts study guide

Sample questions & answers

1. A worn set of brakes that increases the chance of an auto accident is an example of a:

Physical hazard

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

2. An insured who drives carelessly because they know they carry insurance illustrates a:

Morale hazard

A morale hazard is an attitude of carelessness or indifference toward loss that arises because insurance exists.

3. An arrangement in which one insurer transfers part of its risk to another insurer is called:

Reinsurance

Reinsurance is insurance for insurers, allowing a company to transfer part of its risk to another insurer.

4. Purchasing an insurance policy is fundamentally a method of risk:

Transfer

Buying insurance transfers the financial consequences of a risk from the insured to the 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.