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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

West Virginia Personal Lines exam — 62 practice questions.

Subtopics: Insurable interest, Indemnity, Actual cash value, Replacement cost, Coinsurance, Deductible, Subrogation, Proximate cause, Pure risk, Negligence, Pure vs speculative risk, Hazard, Peril, Moral hazard, Morale hazard, Physical hazard, Law of large numbers, Risk avoidance, Risk retention, Risk transfer, Elements of a contract, Contract of adhesion, Aleatory contract, Utmost good faith, Representation, Concealment, Warranty, Express authority, Apparent 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. For property insurance, insurable interest must generally exist:

At the time of the loss

In property insurance, insurable interest must exist at the time of loss so the insured suffers an actual financial loss.

2. The principle of indemnity in property insurance means the insured should be:

Restored to the same financial position as before the loss, no better

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

3. Actual cash value (ACV) is generally calculated as:

Replacement cost minus depreciation

ACV is generally the replacement cost of the property minus depreciation at the time of loss.

4. Replacement cost coverage on a dwelling pays, subject to policy terms, the cost to:

Repair or replace the damaged property without a deduction for depreciation

Replacement cost coverage pays to repair or replace the property with like kind and quality without deducting depreciation, subject to limits.

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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.