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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Washington Accident & Health exam — 46 practice questions.

Subtopics: Peril, Hazard, Moral hazard, Risk pooling, Reasonable expectations, Insurable risk, Risk definition, Morale hazard, Risk transfer, Adverse selection, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Indemnity, Utmost good faith, Representations, Concealment, Aleatory contract, Contract of adhesion, Pure risk, Speculative risk, Law of large numbers, Physical hazard, Implied authority, Fiduciary duty, Warranty, Misrepresentation, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Non-admitted insurer, Alien insurer, Unilateral contract, Conditional contract, Offer and acceptance, Insurable interest

Read the General Insurance Concepts study guide

Sample questions & answers

1. In insurance terms, a peril is best defined as:

The cause of a loss, such as illness or accident

A peril is the direct cause of a loss, such as sickness, injury, fire, or theft.

2. A hazard differs from a peril because a hazard:

Is a condition that increases the chance or severity of a loss

A hazard is a condition that increases the likelihood or severity of a loss, while a peril is the cause of loss.

3. Moral hazard refers to:

The tendency of dishonesty to increase loss likelihood

Moral hazard is the increased chance of loss arising from a person's dishonesty or improper conduct.

4. The basic mechanism that lets insurers spread cost across many insureds is:

Risk pooling

Insurance works by pooling many similar exposures so that the losses of a few are shared among the many.

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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.