2026/2027 - NY Health and Accident Test NY Health and Accident Test.pdf Page 1 of 52
NY Health and Accident Test
Which of the following is NOT one of the three types of hazards?
Accidental Hazard
Which of the following is the PRIMARY source of information used by
insurance companies during the underwriting process?
The application for insurance
Which of the following statements is NOT true concerning the Law of Large
numbers?
The size of the sample group is not relevant to the accuracy of the results
Risk is best defined as:
An uncertainty of loss.
Which of the following is most likely to be uninsurable?
The purchaser of a new home wants to protect herself from a possible drop
in housing prices.
An insurance contract must comply with the "Principle of Indemnity".
Jarron's friend Nick, accidentally destroys Jarron's laptop computer. Nick
Page 1 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
,2026/2027 - NY Health and Accident Test NY Health and Accident Test.pdf Page 2 of 52
pays Jarron for the damage, but Jarron also submits a claim to his
insurance company for the laptop. The claim will be:
Denied because Jarron has already been paid for the damage.
Meg has been in very good health in the past 3 years. She has been
exercising, her blood pressure is at a perfect level and her cholesterol is
the envy of all her friends. Because Meg is feeling so healthy, she decides
to cancel her health insurance policy. This is an example of which of the
following risk management methods?
Risk retention.
Which of the following best demonstrates a morale hazard?
A recent purchaser of auto insurance drives less carefully, knowing that the
insurer will cover any losses that occur
Which of the following phrases best describes a "hazard?"
A condition that increases the chances of a loss
Which of the following is NOT a common risk management technique?
Multiply the risk by engaging in hazardous activities.
Horatio is a business owner who is part of a business owners group that
are buying old commercial buildings in their small city and refurbishing
them. Horatio has bought a beautiful historical building made mostly of
wood. He installs a sprinkler system right away to prevent a fire. What risk
management strategy is Horatio using?
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Risk reduction
All of the following are characteristics of an insurable risk, EXCEPT:
The loss must be catastrophic in nature..
Adverse selection occurs when:
Applicants are accepted by the insurer with little or no attention given to
underwriting.
A 100-year flood is an example of which of the following types of risk?
Static risk
A church has had the woodwork in the building refinished and new stain
and varnish has been applied. The workers placed the rags and brushes
that were used to apply the varnish in a small closet and closed the door,
creating the possibility of spontaneous combustion. Which of the following
terms best describes this condition?
Hazard
Which of the following most accurately describes reinsurance?
When an insurance company buys insurance for some of the risks for
which it has issued coverage.
Which of the following describes a "peril"?
Lightning that strikes a house and destroys electronic equipment inside.
A risk where both profit and loss are possible is a ____________ risk.
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Speculative
Willie's Widgets has been earning a large portion of their market share for
10 years. During Willie's 11th year in business, Wynonna's Widgets opens
and her superior marketing practices leaves Willie unable to continue in
business. Which of the following types of risk caused Willie's loss?
Dynamic risk
Pure Risk
a risk that presents the chance of loss but no opportunity for gain
Speculative Risk
a situation in which either profit or loss is possible
Static Risk
Losses that have historical factors and don't tend to change. Static risks
are pure risks.
Dynamic Risk
The risk that arises from the continual change in the business environment
and therefore dynamic risk cannot be transferred to an insurer.
Fundamental Risk
affects large segments of society
-examples: widespread unemployment, nuclear accident, viruses, inflation,
war, flood
Page 4 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
NY Health and Accident Test
Which of the following is NOT one of the three types of hazards?
Accidental Hazard
Which of the following is the PRIMARY source of information used by
insurance companies during the underwriting process?
The application for insurance
Which of the following statements is NOT true concerning the Law of Large
numbers?
The size of the sample group is not relevant to the accuracy of the results
Risk is best defined as:
An uncertainty of loss.
Which of the following is most likely to be uninsurable?
The purchaser of a new home wants to protect herself from a possible drop
in housing prices.
An insurance contract must comply with the "Principle of Indemnity".
Jarron's friend Nick, accidentally destroys Jarron's laptop computer. Nick
Page 1 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
,2026/2027 - NY Health and Accident Test NY Health and Accident Test.pdf Page 2 of 52
pays Jarron for the damage, but Jarron also submits a claim to his
insurance company for the laptop. The claim will be:
Denied because Jarron has already been paid for the damage.
Meg has been in very good health in the past 3 years. She has been
exercising, her blood pressure is at a perfect level and her cholesterol is
the envy of all her friends. Because Meg is feeling so healthy, she decides
to cancel her health insurance policy. This is an example of which of the
following risk management methods?
Risk retention.
Which of the following best demonstrates a morale hazard?
A recent purchaser of auto insurance drives less carefully, knowing that the
insurer will cover any losses that occur
Which of the following phrases best describes a "hazard?"
A condition that increases the chances of a loss
Which of the following is NOT a common risk management technique?
Multiply the risk by engaging in hazardous activities.
Horatio is a business owner who is part of a business owners group that
are buying old commercial buildings in their small city and refurbishing
them. Horatio has bought a beautiful historical building made mostly of
wood. He installs a sprinkler system right away to prevent a fire. What risk
management strategy is Horatio using?
Page 2 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
,2026/2027 - NY Health and Accident Test NY Health and Accident Test.pdf Page 3 of 52
Risk reduction
All of the following are characteristics of an insurable risk, EXCEPT:
The loss must be catastrophic in nature..
Adverse selection occurs when:
Applicants are accepted by the insurer with little or no attention given to
underwriting.
A 100-year flood is an example of which of the following types of risk?
Static risk
A church has had the woodwork in the building refinished and new stain
and varnish has been applied. The workers placed the rags and brushes
that were used to apply the varnish in a small closet and closed the door,
creating the possibility of spontaneous combustion. Which of the following
terms best describes this condition?
Hazard
Which of the following most accurately describes reinsurance?
When an insurance company buys insurance for some of the risks for
which it has issued coverage.
Which of the following describes a "peril"?
Lightning that strikes a house and destroys electronic equipment inside.
A risk where both profit and loss are possible is a ____________ risk.
Page 3 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
, 2026/2027 - NY Health and Accident Test NY Health and Accident Test.pdf Page 4 of 52
Speculative
Willie's Widgets has been earning a large portion of their market share for
10 years. During Willie's 11th year in business, Wynonna's Widgets opens
and her superior marketing practices leaves Willie unable to continue in
business. Which of the following types of risk caused Willie's loss?
Dynamic risk
Pure Risk
a risk that presents the chance of loss but no opportunity for gain
Speculative Risk
a situation in which either profit or loss is possible
Static Risk
Losses that have historical factors and don't tend to change. Static risks
are pure risks.
Dynamic Risk
The risk that arises from the continual change in the business environment
and therefore dynamic risk cannot be transferred to an insurer.
Fundamental Risk
affects large segments of society
-examples: widespread unemployment, nuclear accident, viruses, inflation,
war, flood
Page 4 of 52 NY Health and Accident Test.pdf NY Health and Accident Test.pdf
