Personal Lines Insurance Questions with 100% Verified Correct Answers 2026

Personal Lines Insurance Questions with 100% Verified Correct Answers 2026 Risk _________ is when one takes action to prevent or reduce potential loss. - Correct Answer Reduction When the number of similar units increases, the predictability of the loss improves according to the rule of _____ ________. - Correct Answer Large Numbers The insuring of risks that are more prone to losses than average risks is known as? - Correct Answer Adverse Selection A ___________ contract is an arrangement where one insurer transfers or shares risks with another insurer. - Correct Answer Reinsurance _____________ Reinsurance is accepted or rejected by a case by case basis. - Correct Answer Facultative The fact that an insured would profit from a loss, would be a violation of the principle of ___________. - Correct Answer Indemnity The determination of acceptable risks is the primary function of the ___________ . - Correct Answer Underwriter Underwriters like to select insureds who's actual losses will be similar to expected losses. True or False? - Correct Answer True When rates cannot be used until they are improved by the department or division of insurance, they are called ____ ________ rates. - Correct Answer Prior Approval The termination of a policy by either the insured or insurer before its expiration date is known as ______