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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Utah Property & Casualty exam — 38 practice questions.

Subtopics: Speculative risk, Indemnity, Material misrepresentation, Waiver, Moral hazard, 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. Which of the following is a speculative risk that is generally NOT insurable?

Opening a restaurant in hopes of a profit

Speculative risk involves a chance of gain as well as loss, such as a business venture, and is generally not insurable.

2. The principle of indemnity is intended to:

Restore the insured to the financial position held before the loss, without profit

Indemnity restores the insured to the pre-loss financial position without permitting a profit from the loss.

3. 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.

4. 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.

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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.