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KY Property & Casualty Insurance Exam
Questions and Correct Answers/ Latest
Update / Already Graded
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard
Ans: Hazard
When a person buys insurance what method of handling risk has been
undertaken?
a) transfer
b) reduction
c) avoidance
d) retention
Ans: Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
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b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation
Ans: At the time of loss
All of the following actions by a person could be described as a risk
avoidance EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year
Ans: Investing in the stock market
Which of the following insurance options would be considered a risk-
sharing arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal
Ans: Reciprocal
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Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard
Ans: Moral hazard
What do individuals use to transfer their risk of loss to a larger group?
a) insurable interest
b) exposure
c) indemnity
d) insurance
Ans: Insurance
For the reported losses of an insured group to become more likely to
equal the statistical probability of loss for that particular class, the
insured group must become:
a) more active
b) larger
All rights reserved © 2025/ 2026 |
KY Property & Casualty Insurance Exam
Questions and Correct Answers/ Latest
Update / Already Graded
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard
Ans: Hazard
When a person buys insurance what method of handling risk has been
undertaken?
a) transfer
b) reduction
c) avoidance
d) retention
Ans: Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
All rights reserved © 2025/ 2026 |
, Page |2
b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation
Ans: At the time of loss
All of the following actions by a person could be described as a risk
avoidance EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year
Ans: Investing in the stock market
Which of the following insurance options would be considered a risk-
sharing arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal
Ans: Reciprocal
All rights reserved © 2025/ 2026 |
, Page |3
Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard
Ans: Moral hazard
What do individuals use to transfer their risk of loss to a larger group?
a) insurable interest
b) exposure
c) indemnity
d) insurance
Ans: Insurance
For the reported losses of an insured group to become more likely to
equal the statistical probability of loss for that particular class, the
insured group must become:
a) more active
b) larger
All rights reserved © 2025/ 2026 |
