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Free General Insurance Concepts Practice Questions

Wisconsin Life exam — 47 practice questions.

Subtopics: Indemnity, Utmost good faith, Adhesion, Aleatory, Consideration, Warranty, Concealment, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Representations, Pure vs speculative risk, Law of large numbers, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Aleatory contract, Contract of adhesion, Unilateral contract, Conditional contract, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance

Read the General Insurance Concepts study guide

Sample questions & answers

1. The principle of indemnity provides that an insured should:

Be restored to the financial position before the loss, not profit from it

Indemnity aims to restore the insured to the pre-loss financial position without allowing a profit from the loss.

2. Insurance contracts are said to be contracts of utmost good faith because:

Both parties rely on honesty and full disclosure

Both parties must deal honestly and disclose material facts, reflecting the doctrine of utmost good faith.

3. An insurance policy is a contract of adhesion, meaning:

It is drafted by the insurer and the insured takes it as written

Because the insurer writes the contract and the insured accepts it as offered, ambiguities are generally construed against the insurer.

4. An aleatory contract is one in which:

The values exchanged may be unequal depending on chance events

Insurance is aleatory because the dollar amounts exchanged by the parties may be unequal, depending on whether a loss occurs.

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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.