GEORGIA PROPERTY AND CASUALTY
INSURANCE FULL QUESTION PAPER 2026 WITH
ANSWERS GRADED A+
◉ Exposure. Answer: susceptibility to risk
◉ Implied Warranty. Answer: a legal term meaning that a product is
suitable for its intended purpose and that it fits an ordinary buyer's
expectations
◉ Insurance policy. Answer: a contract between a policyowner
(and/or insured) and an insurance company which agrees to pay the
insured or the beneficiary for loss caused by specific events
◉ Insurer (principal). Answer: the company who issues an
insurance policy
◉ Obsolescence. Answer: depreciation in the value of a property due
to becoming outdated
◉ Premium. Answer: the money paid to the insurance company for
the insurance policy
,◉ Tort. Answer: a wrongful act or the violation of someone's rights
that leads to legal liability
◉ Insurance. Answer: a transfer of risk of loss from an individual or
a business entity to an insurance company, which, in turn, spreads
the costs of unexpected losses to many individuals.
◉ Law of Large Numbers. Answer: states that the larger the number
of people with a similar exposure to loss, the more predictable
actual losses will be. Forms the basis for statistical prediction of loss
upon which insurance rates are calculated.
◉ Insurable Interest. Answer: Any financial interest in life or
property such that, if the life or property were lost or harmed, the
insured would suffer financially.
◉ The 3 Elements of Insurable Risk. Answer: 1. Financial (a
monetary interest)
2. Blood (a relative)
3. Business (a business partner)
◉ When must insurable interest exist in property and casualty
insurance?. Answer: at the time of the loss
,◉ Risk. Answer: the uncertainty or chance of a loss occurring.
◉ What are the two types of Risk?. Answer: 1. Pure Risk
2. Speculative Risk
◉ Pure Risk. Answer: refers to situations that can only result in a
loss or no change. There is no opportunity for financial gain. Pure
risk is the only type of risk that insurance companies are willing to
accept.
◉ Speculative Risk. Answer: involves the opportunity for either loss
or gain. An example of speculative risk is gambling. These types of
risks are not insurable.
◉ Peril. Answer: A specific cause of loss. These insured against in
standard property policies include fire, wind, hail, and explosions.
◉ Hazards. Answer: conditions or situations that increase the
probability of an insured loss occurring. Conditions such as slippery
floors or congested traffic - which may increase the chance of a loss
occuring
◉ The 3 Types of Hazards. Answer: 1. Physical
2. Moral
, 3. Morale
◉ Physical Hazard. Answer: hazards arising from the material,
structural, or operational features of the risk, apart from the persons
owning or managing it
◉ Moral Hazard. Answer: those applicants that may lie on an
application for insurance, or in the past, have submitted fraudulent
claims against an insurer.
◉ Morale Hazard. Answer: an increase in the hazard presented by a
risk, arising from the insured's indifference to loss because of the
existence of insurance.
◉ Loss. Answer: the reduction, decrease, or dissapearance of value
of the person or property insured in a policy, caused by a named
peril.
◉ Indemnity. Answer: aka reimbursement; a provision in an
insurance policy that states that in the event of loss, an insured or a
beneficiary is permitted to collect only to the extent of the financial
loss, and is not allowed to gain financially because of the existence of
an insurance contract.
INSURANCE FULL QUESTION PAPER 2026 WITH
ANSWERS GRADED A+
◉ Exposure. Answer: susceptibility to risk
◉ Implied Warranty. Answer: a legal term meaning that a product is
suitable for its intended purpose and that it fits an ordinary buyer's
expectations
◉ Insurance policy. Answer: a contract between a policyowner
(and/or insured) and an insurance company which agrees to pay the
insured or the beneficiary for loss caused by specific events
◉ Insurer (principal). Answer: the company who issues an
insurance policy
◉ Obsolescence. Answer: depreciation in the value of a property due
to becoming outdated
◉ Premium. Answer: the money paid to the insurance company for
the insurance policy
,◉ Tort. Answer: a wrongful act or the violation of someone's rights
that leads to legal liability
◉ Insurance. Answer: a transfer of risk of loss from an individual or
a business entity to an insurance company, which, in turn, spreads
the costs of unexpected losses to many individuals.
◉ Law of Large Numbers. Answer: states that the larger the number
of people with a similar exposure to loss, the more predictable
actual losses will be. Forms the basis for statistical prediction of loss
upon which insurance rates are calculated.
◉ Insurable Interest. Answer: Any financial interest in life or
property such that, if the life or property were lost or harmed, the
insured would suffer financially.
◉ The 3 Elements of Insurable Risk. Answer: 1. Financial (a
monetary interest)
2. Blood (a relative)
3. Business (a business partner)
◉ When must insurable interest exist in property and casualty
insurance?. Answer: at the time of the loss
,◉ Risk. Answer: the uncertainty or chance of a loss occurring.
◉ What are the two types of Risk?. Answer: 1. Pure Risk
2. Speculative Risk
◉ Pure Risk. Answer: refers to situations that can only result in a
loss or no change. There is no opportunity for financial gain. Pure
risk is the only type of risk that insurance companies are willing to
accept.
◉ Speculative Risk. Answer: involves the opportunity for either loss
or gain. An example of speculative risk is gambling. These types of
risks are not insurable.
◉ Peril. Answer: A specific cause of loss. These insured against in
standard property policies include fire, wind, hail, and explosions.
◉ Hazards. Answer: conditions or situations that increase the
probability of an insured loss occurring. Conditions such as slippery
floors or congested traffic - which may increase the chance of a loss
occuring
◉ The 3 Types of Hazards. Answer: 1. Physical
2. Moral
, 3. Morale
◉ Physical Hazard. Answer: hazards arising from the material,
structural, or operational features of the risk, apart from the persons
owning or managing it
◉ Moral Hazard. Answer: those applicants that may lie on an
application for insurance, or in the past, have submitted fraudulent
claims against an insurer.
◉ Morale Hazard. Answer: an increase in the hazard presented by a
risk, arising from the insured's indifference to loss because of the
existence of insurance.
◉ Loss. Answer: the reduction, decrease, or dissapearance of value
of the person or property insured in a policy, caused by a named
peril.
◉ Indemnity. Answer: aka reimbursement; a provision in an
insurance policy that states that in the event of loss, an insured or a
beneficiary is permitted to collect only to the extent of the financial
loss, and is not allowed to gain financially because of the existence of
an insurance contract.
