Property & Casualty Practice
PREPARATION TEST 2026 QUESTIONS AND
CORRECT ANSWERS GRADED A+
● Estoppel. Answer: Prevents the denial of a fact previously established
to be true
● The concept that the insured should not profit from an insurance
transaction is called. Answer: The principle of indemnity
● When an individual faces the risk of economic loss in the event of
property damage, this indicates which of the following. Answer:
Insurable Interest
● What is not an option for managing risk. Answer: Subrogating the risk
● What is not true of insurance. Answer: It eliminates risk
● The law of large number provides that. Answer: As the number of
insured units increases, predictability of losses improves
● What does an agent not have the authority to do. Answer: Represent
the insured's interest
, ● What is not a characteristic of a mutual insurance company. Answer:
Stockholder have ownership
● Insurance is and example of which type of risk management
technique. Answer: Transfer of risk
● A hazard is best defined as. Answer: Something that increases the
chance of a loss
● Which term is described as the relinquishment of a legal right.
Answer: Waiver
● What is not a type of insurer. Answer: Proprietary Insurers
● When both parties to a contract must perform certain duties in order
to make the contract enforceable, is known as a(n):. Answer: Conditional
contract
● Which term is defined as the probability of loss. Answer: Risk
● Which type of risk involves the possibility of loss or gain. Answer:
Speculative
PREPARATION TEST 2026 QUESTIONS AND
CORRECT ANSWERS GRADED A+
● Estoppel. Answer: Prevents the denial of a fact previously established
to be true
● The concept that the insured should not profit from an insurance
transaction is called. Answer: The principle of indemnity
● When an individual faces the risk of economic loss in the event of
property damage, this indicates which of the following. Answer:
Insurable Interest
● What is not an option for managing risk. Answer: Subrogating the risk
● What is not true of insurance. Answer: It eliminates risk
● The law of large number provides that. Answer: As the number of
insured units increases, predictability of losses improves
● What does an agent not have the authority to do. Answer: Represent
the insured's interest
, ● What is not a characteristic of a mutual insurance company. Answer:
Stockholder have ownership
● Insurance is and example of which type of risk management
technique. Answer: Transfer of risk
● A hazard is best defined as. Answer: Something that increases the
chance of a loss
● Which term is described as the relinquishment of a legal right.
Answer: Waiver
● What is not a type of insurer. Answer: Proprietary Insurers
● When both parties to a contract must perform certain duties in order
to make the contract enforceable, is known as a(n):. Answer: Conditional
contract
● Which term is defined as the probability of loss. Answer: Risk
● Which type of risk involves the possibility of loss or gain. Answer:
Speculative
