NEW MEXICO PROPERTY AND CASUALTY |
COMPREHENSIVE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
, Insurer The insurance company or professional risk bearer
Insured The persons or business covered by the insurance policy
Loss Any reduction in value, quality or quantity (monetary hardship
Risk The uncertainty or chance of financial loss
SPECULATIVE RISK VS PURE RISK SPECULATIVE RISK offers the chance of loss as well as the oppurtunity for gain. PURE
RISK offers only the chance of loss no gain.
Peril The cause of loss
Hazard Anything that increases the potential or severity of a loss.
Physical Hazard arises from material, structural, or operational features ie: unsanitary conditions slippery
floors
Moral Hazard Arise from a persons value or ethics. Ex: drinking and driving
Morale Hazard A condition of carelessness or indifference that increases the frequency or severity of
loss. Ex: leaving the car running in the morning to warm up.
insurance policy a legal contract between the insured, or purchaser of a policy, and the insurance
company.
COMPREHENSIVE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
, Insurer The insurance company or professional risk bearer
Insured The persons or business covered by the insurance policy
Loss Any reduction in value, quality or quantity (monetary hardship
Risk The uncertainty or chance of financial loss
SPECULATIVE RISK VS PURE RISK SPECULATIVE RISK offers the chance of loss as well as the oppurtunity for gain. PURE
RISK offers only the chance of loss no gain.
Peril The cause of loss
Hazard Anything that increases the potential or severity of a loss.
Physical Hazard arises from material, structural, or operational features ie: unsanitary conditions slippery
floors
Moral Hazard Arise from a persons value or ethics. Ex: drinking and driving
Morale Hazard A condition of carelessness or indifference that increases the frequency or severity of
loss. Ex: leaving the car running in the morning to warm up.
insurance policy a legal contract between the insured, or purchaser of a policy, and the insurance
company.
