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KY PROPERTY & CASUALTY INSURANCE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard - ANSWER Hazard
When a person buys insurance what method of handling risk
has been undertaken?
a) transfer
b) reduction
c) avoidance
d) retention - ANSWER Transfer
In property and casualty insurance, insurable interest must
exist:
a) at the time a change is made to a policy
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b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation - ANSWER At the time of loss
All of the following actions by a person could be described as a
risk avoidance EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year - ANSWER Investing in the stock
market
Which of the following insurance options would be considered
a risk-sharing arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal - ANSWER Reciprocal
Illegal use of narcotics would be an example of:
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a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard - ANSWER Moral hazard
What do individuals use to transfer their risk of loss to a larger
group?
a) insurable interest
b) exposure
c) indemnity
d) insurance - ANSWER Insurance
For the reported losses of an insured group to become more
likely to equal the statistical probability of loss for that
particular class, the insured group must become:
a) more active
b) larger
c) smaller
d) older - ANSWER Larger
KY PROPERTY & CASUALTY INSURANCE EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard - ANSWER Hazard
When a person buys insurance what method of handling risk
has been undertaken?
a) transfer
b) reduction
c) avoidance
d) retention - ANSWER Transfer
In property and casualty insurance, insurable interest must
exist:
a) at the time a change is made to a policy
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b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation - ANSWER At the time of loss
All of the following actions by a person could be described as a
risk avoidance EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year - ANSWER Investing in the stock
market
Which of the following insurance options would be considered
a risk-sharing arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal - ANSWER Reciprocal
Illegal use of narcotics would be an example of:
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a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard - ANSWER Moral hazard
What do individuals use to transfer their risk of loss to a larger
group?
a) insurable interest
b) exposure
c) indemnity
d) insurance - ANSWER Insurance
For the reported losses of an insured group to become more
likely to equal the statistical probability of loss for that
particular class, the insured group must become:
a) more active
b) larger
c) smaller
d) older - ANSWER Larger
