Property & Casualty Insurance
EXAMINATION SET 2026 SOLVED
QUESTIONS GRADED A+
● What kind of risk has an outcome that is uncertain?. Answer:
Speculative Risk
● What is the reason for a claim?. Answer: A loss is the reason a claim
against an insurance company.
● What is the measure of a loss?. Answer: Exposure Units
● Name three types of hazards.. Answer: 1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
● What is a cause of a loss?. Answer: Perils are the causes of possible
loss
● What is the common way to transfer risk?. Answer: The most
common method of risk transfer is when a homeowner purchases
insurance on their home..
, ● Define adverse selection.. Answer: Insuring risks more prone to losses
than an average risk.
● What is the theory of probability that is the basis for insurance?.
Answer: The Law of Large Numbers
● Who manages a Mutual Company. Answer: A Boar of Trustees
● What is high risk coverage purchased from an unauthorized
company?. Answer: Surplus Lines Insurers
● How are insurance companies defined?. Answer: Where they are
located, chartered, or incorporated.
● What protects policy holders from an insurer's insolvency?. Answer:
Property and Casualty Insurance Guaranty Association
● What must all insurers obtain to conduct insurance business?.
Answer: Certificate of Authority
● Who does an agent represent?. Answer: Always deemed to represent
an insurer (company)
EXAMINATION SET 2026 SOLVED
QUESTIONS GRADED A+
● What kind of risk has an outcome that is uncertain?. Answer:
Speculative Risk
● What is the reason for a claim?. Answer: A loss is the reason a claim
against an insurance company.
● What is the measure of a loss?. Answer: Exposure Units
● Name three types of hazards.. Answer: 1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
● What is a cause of a loss?. Answer: Perils are the causes of possible
loss
● What is the common way to transfer risk?. Answer: The most
common method of risk transfer is when a homeowner purchases
insurance on their home..
, ● Define adverse selection.. Answer: Insuring risks more prone to losses
than an average risk.
● What is the theory of probability that is the basis for insurance?.
Answer: The Law of Large Numbers
● Who manages a Mutual Company. Answer: A Boar of Trustees
● What is high risk coverage purchased from an unauthorized
company?. Answer: Surplus Lines Insurers
● How are insurance companies defined?. Answer: Where they are
located, chartered, or incorporated.
● What protects policy holders from an insurer's insolvency?. Answer:
Property and Casualty Insurance Guaranty Association
● What must all insurers obtain to conduct insurance business?.
Answer: Certificate of Authority
● Who does an agent represent?. Answer: Always deemed to represent
an insurer (company)
