Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
An individual applied for auto insurance and obtained
coverage from ABC Insurance Company. Who is the first party
in the contract?
A. The insured
B. The insurer
C. The agent
D. The insured and agent - Correct Answers ✅The insured
(customer)
If a fire causes damge to a building the fire is
A. a hazard
B. a peril
C. a risk
D. an exposure - Correct Answers ✅A peril
Wearing a seatbelt in a car is an example if which method of
managing risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer - Correct Answers ✅Reduce
,Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
Tiff leaves her car unlocked when she goes shopping. She
figures her car and its contents are insured, so there is no
reason to worry. Which type of hazard is this an example of?
A. Physical
B. Morale
C. Carless
D. Moral - Correct Answers ✅Morale
A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard - Correct Answers ✅Peril
An insurance company incorporated in Wisconsin and
conducting business in Wisconsin is known as a domestic
company. What kind of company are they considered if they
do business in Minnesota
A. Alien
B. Domestic
,Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
C. Foreign
D. Nonadmitted - Correct Answers ✅Foreign
All of the following statements about a stock company are
true except:
A. stock company pays dividends to stockholders
B. stock company is a participating company
C. stock company is a nonparticipating company
D. stock company has shareholders - Correct Answers
✅stock company is a participating company
What do insurance companies use to help predict how many
losses will occur in a group or class of individuals?
A. The law of large numbers
B. Standard and Poor's Insurance Rating Service
C. Risk retention group
D. Adverse selection - Correct Answers ✅The law of large
numbers
State requires companies to have a license to sell insurance
in the state. The license is called:
, Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
A. a certificate of authority
B. a reinsurance license
C. a producer's license
D. an admittance license - Correct Answers ✅a certificate
of authority
All of the following are requirements of an insurable pure risk
EXCEPT:
A. premium must be calculable
B. premium must be affordable
C. teh risk must be catastrophic for the insurance company
D. the loss must have been accidental - Correct Answers
✅the risk must be catastrophic for the insurance company
Insurers may be classified according to their financial
strength. This includes all of the following factors except:
A. number of clients
B. loss experience
C. investment performance
D. operating expenses - Correct Answers ✅number of
clients
Questions and Answers (Solved Papers)
An individual applied for auto insurance and obtained
coverage from ABC Insurance Company. Who is the first party
in the contract?
A. The insured
B. The insurer
C. The agent
D. The insured and agent - Correct Answers ✅The insured
(customer)
If a fire causes damge to a building the fire is
A. a hazard
B. a peril
C. a risk
D. an exposure - Correct Answers ✅A peril
Wearing a seatbelt in a car is an example if which method of
managing risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer - Correct Answers ✅Reduce
,Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
Tiff leaves her car unlocked when she goes shopping. She
figures her car and its contents are insured, so there is no
reason to worry. Which type of hazard is this an example of?
A. Physical
B. Morale
C. Carless
D. Moral - Correct Answers ✅Morale
A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard - Correct Answers ✅Peril
An insurance company incorporated in Wisconsin and
conducting business in Wisconsin is known as a domestic
company. What kind of company are they considered if they
do business in Minnesota
A. Alien
B. Domestic
,Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
C. Foreign
D. Nonadmitted - Correct Answers ✅Foreign
All of the following statements about a stock company are
true except:
A. stock company pays dividends to stockholders
B. stock company is a participating company
C. stock company is a nonparticipating company
D. stock company has shareholders - Correct Answers
✅stock company is a participating company
What do insurance companies use to help predict how many
losses will occur in a group or class of individuals?
A. The law of large numbers
B. Standard and Poor's Insurance Rating Service
C. Risk retention group
D. Adverse selection - Correct Answers ✅The law of large
numbers
State requires companies to have a license to sell insurance
in the state. The license is called:
, Tennessee Property and Casualty Exam
Questions and Answers (Solved Papers)
A. a certificate of authority
B. a reinsurance license
C. a producer's license
D. an admittance license - Correct Answers ✅a certificate
of authority
All of the following are requirements of an insurable pure risk
EXCEPT:
A. premium must be calculable
B. premium must be affordable
C. teh risk must be catastrophic for the insurance company
D. the loss must have been accidental - Correct Answers
✅the risk must be catastrophic for the insurance company
Insurers may be classified according to their financial
strength. This includes all of the following factors except:
A. number of clients
B. loss experience
C. investment performance
D. operating expenses - Correct Answers ✅number of
clients
