Exam FX: Personal Lines Insurance:
General Insurance Questions with Correct
Answers 2025/2026
Agent/ Producer - CORRECT ANSWER -a legal representative of an insurance company; the
classification of a producer usually included agents and brokers; agents are the agents of the
insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Broker - CORRECT ANSWER -an insurance producer not appointed by an insurer and is deemed
to represent the client
Insurance policy - CORRECT ANSWER -a contract between a policyowner (and/or insured) and
an insurance company which agrees to pat the insured or the beneficiary for loss caused by
specific events
Insured - CORRECT ANSWER -the person covered by the insurance policy. This person may or
may not be the policyowner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance policy. An entity
that indemnifies against losses, provide benefits or renders services
Policyowner - CORRECT ANSWER -the person entitles to exercise the rights and privileges in the
policy. this person may or may not be insured
Premium - CORRECT ANSWER -the money paid to the insurance company for the insurance
policy. It's a periodic payment to the insurance company to keep the policy in force
, Reciprocity/Reciprocal - CORRECT ANSWER -a mutual interchange of rights and privileges
Insurance - CORRECT ANSWER -the transfer of the possibility of a loss (risk) to an insurance
company, which in turn spreads the cost of unexpected losses to many individuals
Risk - CORRECT ANSWER -is the uncertainty or chance of a loss occurring. The two types of risks
are pure and speculative, only one of which is insurable
Pure Risk - CORRECT ANSWER -refers to situations that can only result in a loss or no change.
There is no opportunity for financial gain. It is the only type of risk that insurance companies are
willing to accept
Speculative Risk - CORRECT ANSWER -involves the opportunity for either loss or gain. An
example of speculative risk is gambling. These types of risk are NOT insurable
Transacting Insurance - CORRECT ANSWER -includes any of the following:
S- Sale (effectuation of a contract of insurance)
A- Advising (concerning converge or claims)
N- Negotiating (insurance or annuities)
S- Soliciting (insurance or annuities on behalf of another person)
Exposure - CORRECT ANSWER -is a unit of measurement used to determine rates charged for
insurance converge.
What are the three types of Hazards - CORRECT ANSWER -Physical: a physical condition that can
increase the chance of loss (cracks in the foundation of your home)
General Insurance Questions with Correct
Answers 2025/2026
Agent/ Producer - CORRECT ANSWER -a legal representative of an insurance company; the
classification of a producer usually included agents and brokers; agents are the agents of the
insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Broker - CORRECT ANSWER -an insurance producer not appointed by an insurer and is deemed
to represent the client
Insurance policy - CORRECT ANSWER -a contract between a policyowner (and/or insured) and
an insurance company which agrees to pat the insured or the beneficiary for loss caused by
specific events
Insured - CORRECT ANSWER -the person covered by the insurance policy. This person may or
may not be the policyowner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance policy. An entity
that indemnifies against losses, provide benefits or renders services
Policyowner - CORRECT ANSWER -the person entitles to exercise the rights and privileges in the
policy. this person may or may not be insured
Premium - CORRECT ANSWER -the money paid to the insurance company for the insurance
policy. It's a periodic payment to the insurance company to keep the policy in force
, Reciprocity/Reciprocal - CORRECT ANSWER -a mutual interchange of rights and privileges
Insurance - CORRECT ANSWER -the transfer of the possibility of a loss (risk) to an insurance
company, which in turn spreads the cost of unexpected losses to many individuals
Risk - CORRECT ANSWER -is the uncertainty or chance of a loss occurring. The two types of risks
are pure and speculative, only one of which is insurable
Pure Risk - CORRECT ANSWER -refers to situations that can only result in a loss or no change.
There is no opportunity for financial gain. It is the only type of risk that insurance companies are
willing to accept
Speculative Risk - CORRECT ANSWER -involves the opportunity for either loss or gain. An
example of speculative risk is gambling. These types of risk are NOT insurable
Transacting Insurance - CORRECT ANSWER -includes any of the following:
S- Sale (effectuation of a contract of insurance)
A- Advising (concerning converge or claims)
N- Negotiating (insurance or annuities)
S- Soliciting (insurance or annuities on behalf of another person)
Exposure - CORRECT ANSWER -is a unit of measurement used to determine rates charged for
insurance converge.
What are the three types of Hazards - CORRECT ANSWER -Physical: a physical condition that can
increase the chance of loss (cracks in the foundation of your home)
