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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Tennessee Personal Lines exam — 58 practice questions.

Subtopics: Binder, Endorsement, Apparent authority, Utmost good faith, Representation, Proximate cause, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, Risk avoidance, Risk retention, Risk transfer, Insurable interest, Indemnity, Elements of a contract, Contract of adhesion, Aleatory contract, Concealment, Warranty, Express 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, Unilateral contract, Conditional contract, Personal contract, 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. A temporary agreement providing coverage until the policy is issued is a:

Binder

A binder is a temporary contract providing coverage until the formal policy is issued or declined.

2. A written amendment that changes the terms of a property and casualty policy is an:

Endorsement

An endorsement is a written amendment that adds to, deletes, or modifies the policy's terms.

3. When an insurer's conduct leads an applicant to reasonably believe a producer can bind coverage they cannot, this is:

Apparent authority

Apparent authority arises when the insurer's conduct causes a third party to reasonably believe the producer has authority they do not actually possess.

4. The requirement that both parties act honestly and disclose material facts when forming an insurance contract is:

Utmost good faith

Insurance contracts rest on utmost good faith, requiring honesty and disclosure of material facts by both parties.

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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.