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WASHINGTON STATE INSURANCE EXAM LATEST
QUESTIONS WITH ANSWERS (100% CORRECT
ANSWERS)
Apparent Answer: is the appearance or assumption of authority based on the actions, words,
or deeds of the principal or because of circumstances the principal created.
Mutual Company Answer: Owned by the policyowner and issue participating policies. Policy
owners are entitled to dividends, which are a return of excess premiums and are therefore
non-taxable. Dividends are not guaranteed.
Sharing Answer: A method of dealing with risk for a group of individual persons or businesses
with the same or similar exposure to loss to share the losses that occur within that group. A
RECIPROCAL insurance exchange is a form of risk-sharing arrangement.
Retention Answer: Is the planned assumption of risk by the insured through the use of
deductibles, co-payments, or self-insurance. It is also known as self-insurance when the
insured accepts the responsibility for the loss before the insurance company pays.
Express Authority Answer: Is the AUTHORITY a principal intends to grant to an agent by
means of the agent's contract. It is the authority that is written in the contract.
Insurable Risk Answer: In order to be characterized as a pure risk, the loss must be due to
chance, definite, measurable, and predictable, but not catastrophic.
Insurance Policy Conditions Answer: Section of an insurance policy that indicates the general
rules or procedures that the insurer and insured agree to follow under the terms of the policy.
Examples: Inspection may be made as needed/ Changes to the policy must be made by insurer
and be in writing/ Liberalization clause/ Return of premiums, which dictates methods used.
Loss Costs Rating Answer: Type of rating: Method developed by the insurance services office
Inc. (ISO) that provides an insurer with that portion of a rate that does not include provisions
of expenses or profit and are based on historical aggregate loss and loss adjustment expenses
© 2025 All rights reserved
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projected through development to their ultimate value and through trending to a future point
in time.
Strict Liability Answer: Is commonly applied in product liability cases. The business is then
liable for defective products, regardless of fault or negligence.
Insuring Agreement Answer: The part of the policy structure that describes the insured perils
and the method of indemnification.
Conditions Answer: States the legal obligations and duties of the parties to the contract.
Valued Policy Answer: Provides for payment of the full policy amount in the event of a total
loss WITHOUT regard to actual value or depreciation.
Contributory Negligence Answer: In states that have this, the defendant must have been
100% at fault for an accident and the claimant free of fault if the claimant is to be successful
in collecting damages.
Agreed Value Answer: A property policy with provisions agreed upon by the insurer and
insured as to the amounts of insurance that represents a fair valuation for the property at the
time the insurance is written. The amount is paid in a loss, regardless of the insured
property's appreciation or depreciation.
Occurance Answer: Includes those losses caused by continuous or repeated exposure to
conditions resulting in injury or damage to property that is neither intended nor expected.
Consequential loss Answer: Also known as an indirect loss, is a second financial loss caused
by a covered direct loss.
Nonconcurrency Answer: Refers to other insurance written on the same risk, but not on the
same coverage basis.
Negligence Answer: Four essential elements: Duty, breach, injury, and unbroken chain.
Stated Amount Answer: The value of the insured property is determined at the time the
policy is written. In the event of a loss, that amount is paid without regard to any
© 2025 All rights reserved
WASHINGTON STATE INSURANCE EXAM LATEST
QUESTIONS WITH ANSWERS (100% CORRECT
ANSWERS)
Apparent Answer: is the appearance or assumption of authority based on the actions, words,
or deeds of the principal or because of circumstances the principal created.
Mutual Company Answer: Owned by the policyowner and issue participating policies. Policy
owners are entitled to dividends, which are a return of excess premiums and are therefore
non-taxable. Dividends are not guaranteed.
Sharing Answer: A method of dealing with risk for a group of individual persons or businesses
with the same or similar exposure to loss to share the losses that occur within that group. A
RECIPROCAL insurance exchange is a form of risk-sharing arrangement.
Retention Answer: Is the planned assumption of risk by the insured through the use of
deductibles, co-payments, or self-insurance. It is also known as self-insurance when the
insured accepts the responsibility for the loss before the insurance company pays.
Express Authority Answer: Is the AUTHORITY a principal intends to grant to an agent by
means of the agent's contract. It is the authority that is written in the contract.
Insurable Risk Answer: In order to be characterized as a pure risk, the loss must be due to
chance, definite, measurable, and predictable, but not catastrophic.
Insurance Policy Conditions Answer: Section of an insurance policy that indicates the general
rules or procedures that the insurer and insured agree to follow under the terms of the policy.
Examples: Inspection may be made as needed/ Changes to the policy must be made by insurer
and be in writing/ Liberalization clause/ Return of premiums, which dictates methods used.
Loss Costs Rating Answer: Type of rating: Method developed by the insurance services office
Inc. (ISO) that provides an insurer with that portion of a rate that does not include provisions
of expenses or profit and are based on historical aggregate loss and loss adjustment expenses
© 2025 All rights reserved
, 2
projected through development to their ultimate value and through trending to a future point
in time.
Strict Liability Answer: Is commonly applied in product liability cases. The business is then
liable for defective products, regardless of fault or negligence.
Insuring Agreement Answer: The part of the policy structure that describes the insured perils
and the method of indemnification.
Conditions Answer: States the legal obligations and duties of the parties to the contract.
Valued Policy Answer: Provides for payment of the full policy amount in the event of a total
loss WITHOUT regard to actual value or depreciation.
Contributory Negligence Answer: In states that have this, the defendant must have been
100% at fault for an accident and the claimant free of fault if the claimant is to be successful
in collecting damages.
Agreed Value Answer: A property policy with provisions agreed upon by the insurer and
insured as to the amounts of insurance that represents a fair valuation for the property at the
time the insurance is written. The amount is paid in a loss, regardless of the insured
property's appreciation or depreciation.
Occurance Answer: Includes those losses caused by continuous or repeated exposure to
conditions resulting in injury or damage to property that is neither intended nor expected.
Consequential loss Answer: Also known as an indirect loss, is a second financial loss caused
by a covered direct loss.
Nonconcurrency Answer: Refers to other insurance written on the same risk, but not on the
same coverage basis.
Negligence Answer: Four essential elements: Duty, breach, injury, and unbroken chain.
Stated Amount Answer: The value of the insured property is determined at the time the
policy is written. In the event of a loss, that amount is paid without regard to any
© 2025 All rights reserved
