MN INSURANCE CORE EXAM MANUAL 2025/2026 ALL
QUESTIONS AND SOLUTIONS GRADED A+ TIP
✔✔Moral Hazard - ✔✔A condition of morals or habits that increases the probability of a
loss from peril.
✔✔Morale Hazard - ✔✔Hazard arising out of an insured's indifference to loss because
of the existence of insurance.
✔✔Pure Risk - ✔✔A situation where there is only the possibility of a loss. Example
would be catastrophic medical expenses, liability law suit, damage to property by fire.
This type of risk is insurable.
✔✔Speculative Risk - ✔✔A situation where either profit or loss in possible. Example
would be betting on a horse race or investing in real estate. This type of risk in not
insurable.
✔✔Static Risk - ✔✔These factors are historical factors that do no frequently fluctuate.
They result from "static" or "unchanging" environment. Example would be an area that
may only flood every 100 years. This type of risk is insurable.
✔✔Dynamic Risk - ✔✔This is associated with chance. Example would be a new and
fatal virus spontaneously erupting into society. This is not insurable.
✔✔Waiver - ✔✔Generally defined as the voluntary or intentional relinquishment of a
know right. An example would be an insured who fails to report a claim in a timely
manner. There are two types; Expressed and Implied.
✔✔Expressed Waiver - ✔✔Occurs when the insurer the insurer or its representatives
purposely gives up known right under the contract.
✔✔Implied Waiver - ✔✔May result from some kind of neglect on the part of the agent or
adjuster.
✔✔Replacement Cost - ✔✔The current cost to purchase new, the item that was lost,
with no deduction or depreciation. The full value will be paid up to the limit of the policy
less any deductible.
✔✔Occurence - ✔✔A sudden and unforeseen event resulting in financial loss. It may
also be continuous or repeated exposure to an event that results in financial loss.
✔✔Insuring Agreement - ✔✔Describes the covered perils, or risks assumed, or nature
of coverage, or makes some reference to the contractual agreement between insurer
QUESTIONS AND SOLUTIONS GRADED A+ TIP
✔✔Moral Hazard - ✔✔A condition of morals or habits that increases the probability of a
loss from peril.
✔✔Morale Hazard - ✔✔Hazard arising out of an insured's indifference to loss because
of the existence of insurance.
✔✔Pure Risk - ✔✔A situation where there is only the possibility of a loss. Example
would be catastrophic medical expenses, liability law suit, damage to property by fire.
This type of risk is insurable.
✔✔Speculative Risk - ✔✔A situation where either profit or loss in possible. Example
would be betting on a horse race or investing in real estate. This type of risk in not
insurable.
✔✔Static Risk - ✔✔These factors are historical factors that do no frequently fluctuate.
They result from "static" or "unchanging" environment. Example would be an area that
may only flood every 100 years. This type of risk is insurable.
✔✔Dynamic Risk - ✔✔This is associated with chance. Example would be a new and
fatal virus spontaneously erupting into society. This is not insurable.
✔✔Waiver - ✔✔Generally defined as the voluntary or intentional relinquishment of a
know right. An example would be an insured who fails to report a claim in a timely
manner. There are two types; Expressed and Implied.
✔✔Expressed Waiver - ✔✔Occurs when the insurer the insurer or its representatives
purposely gives up known right under the contract.
✔✔Implied Waiver - ✔✔May result from some kind of neglect on the part of the agent or
adjuster.
✔✔Replacement Cost - ✔✔The current cost to purchase new, the item that was lost,
with no deduction or depreciation. The full value will be paid up to the limit of the policy
less any deductible.
✔✔Occurence - ✔✔A sudden and unforeseen event resulting in financial loss. It may
also be continuous or repeated exposure to an event that results in financial loss.
✔✔Insuring Agreement - ✔✔Describes the covered perils, or risks assumed, or nature
of coverage, or makes some reference to the contractual agreement between insurer
