WEST VIRGINIA INSURANCE PROPERTY AND CASUALTY SET
TEST QUESTIONS AND 100% CORRECT ANSWERS. 2025
QUESTION: What is based on the principle of Risk Transfer - ANSWER-Spreading the results of a financial
loss among many persons, so the cost to any one person is small
QUESTION: What kind of risk has an outcome that is uncertain? - ANSWER-Speculative Risk
QUESTION: What is the reason for a claim? - ANSWER-A loss is the reason a claim against an insurance
company.
QUESTION: What is the measure of a loss? - ANSWER-Exposure Units
QUESTION: Name three types of hazards. - ANSWER-1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
QUESTION: What is a cause of a loss? - ANSWER-Perils are the causes of possible loss
QUESTION: What is the common way to transfer risk? - ANSWER-The most common method of risk
transfer is when a homeowner purchases insurance on their home..
QUESTION: Define adverse selection. - ANSWER-Insuring risks more prone to losses than an average risk.
QUESTION: What is the theory of probability that is the basis for insurance? - ANSWER-The Law of Large
Numbers
QUESTION: Who manages a Mutual Company - ANSWER-A Boar of Trustees
, QUESTION: What is high risk coverage purchased from an unauthorized company? - ANSWER-Surplus
Lines Insurers
QUESTION: How are insurance companies defined? - ANSWER-Where they are located, chartered, or
incorporated.
QUESTION: What protects policy holders from an insurer's insolvency? - ANSWER-Property and Casualty
Insurance Guaranty Association
QUESTION: What must all insurers obtain to conduct insurance business? - ANSWER-Certificate of
Authority
QUESTION: Who does an agent represent? - ANSWER-Always deemed to represent an insurer
(company)
QUESTION: What is the authority that is written in a contract? - ANSWER-Express Authority
QUESTION: What are the four elements of a contract? - ANSWER-1. Offer and Acceptance
2. Consideration
3. Competent Parties
4. Legal Purpose
QUESTION: Define a fiduciary. - ANSWER-An agent/broker who handles insurer's funds in a trust
capacity
QUESTION: What is a value in a contract? - ANSWER-The consideration
QUESTION: What is the fine for violating the Fair Credit Reporting Act? - ANSWER-A maximum fine of
$2,500.00
QUESTION: What must an insured have in regards to their covered property with their insurer? -
ANSWER-Insurable Interest
TEST QUESTIONS AND 100% CORRECT ANSWERS. 2025
QUESTION: What is based on the principle of Risk Transfer - ANSWER-Spreading the results of a financial
loss among many persons, so the cost to any one person is small
QUESTION: What kind of risk has an outcome that is uncertain? - ANSWER-Speculative Risk
QUESTION: What is the reason for a claim? - ANSWER-A loss is the reason a claim against an insurance
company.
QUESTION: What is the measure of a loss? - ANSWER-Exposure Units
QUESTION: Name three types of hazards. - ANSWER-1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
QUESTION: What is a cause of a loss? - ANSWER-Perils are the causes of possible loss
QUESTION: What is the common way to transfer risk? - ANSWER-The most common method of risk
transfer is when a homeowner purchases insurance on their home..
QUESTION: Define adverse selection. - ANSWER-Insuring risks more prone to losses than an average risk.
QUESTION: What is the theory of probability that is the basis for insurance? - ANSWER-The Law of Large
Numbers
QUESTION: Who manages a Mutual Company - ANSWER-A Boar of Trustees
, QUESTION: What is high risk coverage purchased from an unauthorized company? - ANSWER-Surplus
Lines Insurers
QUESTION: How are insurance companies defined? - ANSWER-Where they are located, chartered, or
incorporated.
QUESTION: What protects policy holders from an insurer's insolvency? - ANSWER-Property and Casualty
Insurance Guaranty Association
QUESTION: What must all insurers obtain to conduct insurance business? - ANSWER-Certificate of
Authority
QUESTION: Who does an agent represent? - ANSWER-Always deemed to represent an insurer
(company)
QUESTION: What is the authority that is written in a contract? - ANSWER-Express Authority
QUESTION: What are the four elements of a contract? - ANSWER-1. Offer and Acceptance
2. Consideration
3. Competent Parties
4. Legal Purpose
QUESTION: Define a fiduciary. - ANSWER-An agent/broker who handles insurer's funds in a trust
capacity
QUESTION: What is a value in a contract? - ANSWER-The consideration
QUESTION: What is the fine for violating the Fair Credit Reporting Act? - ANSWER-A maximum fine of
$2,500.00
QUESTION: What must an insured have in regards to their covered property with their insurer? -
ANSWER-Insurable Interest
