OHIO PERSONAL LINES (INSURANCE EXAM) QUESTIONS WITH
CORRECT ANSWERS 2025/2026
Stock Insurance Company - CORRECT ANSWER -Issues non-participating policies and is owned
by stockholders who received taxable corporate dividends as a return profit
Reinsurance - CORRECT ANSWER -The transfer of risk between insurance companies. The
reinsurer assumes some or all of the risks of the ceding, or primary, insurance company
Domestic - CORRECT ANSWER -Insurer organized under the laws of the resident state
Foreign - CORRECT ANSWER -Insurer organized under the laws of another state within the
United States
Alien - CORRECT ANSWER -Insurer oganized under the laws of a country outside of the United
States
Domicile - CORRECT ANSWER -Refers to the state in which an insurer is incorporated
Express - CORRECT ANSWER -Authority that is written into the producers agency contract
Implied - CORRECT ANSWER -Authority that in which the public and the insurer assumes the
agent possesses
Apparent - CORRECT ANSWER -Authority created when the agent exceeds express authority and
the insurer does not respond
,FCRA - CORRECT ANSWER -Protects consumer privacy by ensuring that any data collected by an
insurer remains confidential, and is accurate, relevant, and used for a proper and specific
purpose
Risk - CORRECT ANSWER -The uncertainty of a loss
Peril - CORRECT ANSWER -The cause of a loss
Hazard - CORRECT ANSWER -Increases the possibility of a loss
Indemnity - CORRECT ANSWER -Does not allow the insured to profit from a loss; instead, it
restores the insured to the same financial or economic condition the existed prior to loss
Adhesion - CORRECT ANSWER -One party (the insurer) prepares the contract and presents it to
the second party (the insured), who must accept it on a "take-it-or-leave-it" basis
Types Of Insurers - CORRECT ANSWER -Stock Insurers, Mutual Insurers, Reciprocal Insurers, and
Self-Insurer
Reduction - CORRECT ANSWER -Minimizing the chance of a loss without eliminating the risk
altogether
Retention - CORRECT ANSWER -Assuming responsibility for a loss
Conditional - CORRECT ANSWER -A contract that requires that both parties perform certain
duties
Acutuary - CORRECT ANSWER -Determines the probability of loss and sets premium rates
, Physical - CORRECT ANSWER -A hazard that occurs when a physical condition increases the
probability of loss; use, condition, or occupancy of property
Moral - CORRECT ANSWER -A hazard that occurs when dishonest tendencies increase the
probability of a loss; certain characteristics and behaviors of people
Morale - CORRECT ANSWER -A hazard that occurs when a persons attitude increases the
probability of a loss
Speculative Risk - CORRECT ANSWER -Situations where there is a chance or possibility for loss,
no loss or gain
Pure Risk - CORRECT ANSWER -Situations where there is no chance for gain, only loss. The only
risk that can be insured
Misreprensentation - CORRECT ANSWER -False statement contained in the insured's application
and does not usually void coverage or the policy
Fraud - CORRECT ANSWER -An intentional deception of the truth in order to induce another
party with something of value or to surrender a legal right
Concealment - CORRECT ANSWER -The willful holding back or secretion of material facts
pertinent to the issuance of insurance or claim
Reinsurance - CORRECT ANSWER -A contract between the insuring company and the reinsurer,
and does not involve the insured
CORRECT ANSWERS 2025/2026
Stock Insurance Company - CORRECT ANSWER -Issues non-participating policies and is owned
by stockholders who received taxable corporate dividends as a return profit
Reinsurance - CORRECT ANSWER -The transfer of risk between insurance companies. The
reinsurer assumes some or all of the risks of the ceding, or primary, insurance company
Domestic - CORRECT ANSWER -Insurer organized under the laws of the resident state
Foreign - CORRECT ANSWER -Insurer organized under the laws of another state within the
United States
Alien - CORRECT ANSWER -Insurer oganized under the laws of a country outside of the United
States
Domicile - CORRECT ANSWER -Refers to the state in which an insurer is incorporated
Express - CORRECT ANSWER -Authority that is written into the producers agency contract
Implied - CORRECT ANSWER -Authority that in which the public and the insurer assumes the
agent possesses
Apparent - CORRECT ANSWER -Authority created when the agent exceeds express authority and
the insurer does not respond
,FCRA - CORRECT ANSWER -Protects consumer privacy by ensuring that any data collected by an
insurer remains confidential, and is accurate, relevant, and used for a proper and specific
purpose
Risk - CORRECT ANSWER -The uncertainty of a loss
Peril - CORRECT ANSWER -The cause of a loss
Hazard - CORRECT ANSWER -Increases the possibility of a loss
Indemnity - CORRECT ANSWER -Does not allow the insured to profit from a loss; instead, it
restores the insured to the same financial or economic condition the existed prior to loss
Adhesion - CORRECT ANSWER -One party (the insurer) prepares the contract and presents it to
the second party (the insured), who must accept it on a "take-it-or-leave-it" basis
Types Of Insurers - CORRECT ANSWER -Stock Insurers, Mutual Insurers, Reciprocal Insurers, and
Self-Insurer
Reduction - CORRECT ANSWER -Minimizing the chance of a loss without eliminating the risk
altogether
Retention - CORRECT ANSWER -Assuming responsibility for a loss
Conditional - CORRECT ANSWER -A contract that requires that both parties perform certain
duties
Acutuary - CORRECT ANSWER -Determines the probability of loss and sets premium rates
, Physical - CORRECT ANSWER -A hazard that occurs when a physical condition increases the
probability of loss; use, condition, or occupancy of property
Moral - CORRECT ANSWER -A hazard that occurs when dishonest tendencies increase the
probability of a loss; certain characteristics and behaviors of people
Morale - CORRECT ANSWER -A hazard that occurs when a persons attitude increases the
probability of a loss
Speculative Risk - CORRECT ANSWER -Situations where there is a chance or possibility for loss,
no loss or gain
Pure Risk - CORRECT ANSWER -Situations where there is no chance for gain, only loss. The only
risk that can be insured
Misreprensentation - CORRECT ANSWER -False statement contained in the insured's application
and does not usually void coverage or the policy
Fraud - CORRECT ANSWER -An intentional deception of the truth in order to induce another
party with something of value or to surrender a legal right
Concealment - CORRECT ANSWER -The willful holding back or secretion of material facts
pertinent to the issuance of insurance or claim
Reinsurance - CORRECT ANSWER -A contract between the insuring company and the reinsurer,
and does not involve the insured
