OHIO PROPERTY AND CASUALTY
EXAM 2025 QUESTIONS AND ANSWERS
What do individuals use to transfer their risk of loss to a larger group? - ANS Insurance
What are the four elements of an insurance contract? - ANS Agreement (Offer and
Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? - ANS Insurer
Insurance contracts are aleatory in nature. What does that mean? - ANS Unequal values are
exchanged between the parties to a contract.
What are the methods of managing risk? - ANS Avoidance, transfer, sharing, retention, and
reduction
In insurance contracts, when does acceptance usually occur? - ANS When the insurer
approves a prepaid application
Wagering on a sporting event is known as what type of risk? - ANS Speculative
A situation in which a person can experience only a loss and no gain presents what type of risk?
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- ANS Pure Risk
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, What type of insurer is formed under the laws of another state? - ANS Foreign
When would a misrepresentation on an insurance application be considered fraud? -
ANS When it is intentional and material
According to the Law of Agency, who represents the principal? - ANS Agent or producer
What does indemnify mean in insurance? - ANS To restore an insured to the same financial
status as before a loss.
What is a warranty in an insurance contract? - ANS An absolutely true statement upon which
the validity of the policy depends.
What is the term for the causes of loss insured against in an insurance policy? - ANS Peril
What is a risk? - ANS Uncertainty of loss
If an insurer holds a Certificate of Authority, it is known as what type of insurer? -
ANS Authorized or Admitted
What is consideration in an insurance contract? - ANS Consideration is something of value
that each party gives to the other. Consideration on the part of the insurer is binding.
What is consideration on the part of the insurer? - ANS A promise to pay in the event of a
loss
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A tornado that destroys a property would be an example of what? - ANS Peril
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, What does the term reasonable expectations mean in insurance? - ANS Certain expectations
for coverage that a reasonable person would have based on sources other than just the policy
language.
Conditions that increase the chance of loss are known as what? - ANS Hazards
What provision states that if a policy allows for greater benefits than the financial loss incurred,
the insured may be compensated only for the amount lost? - ANS Indemnity
What are the three types of hazards? - ANS Physical, moral, and morale
What document is required for an insurance company to transact insurance? -
ANS Certificate of Authority
What does the term unilateral contract mean? - ANS A unilateral contract is a one-sided
contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? - ANS When the insurance
application is submitted.
What are the three types of agent authority? - ANS Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers? -
ANS Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? - ANS Apparent
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@COPYRIGHT @THEBRIGHT 2025/2026
EXAM 2025 QUESTIONS AND ANSWERS
What do individuals use to transfer their risk of loss to a larger group? - ANS Insurance
What are the four elements of an insurance contract? - ANS Agreement (Offer and
Acceptance), Consideration, Competent parties, and legal purpose.
In the agent/insurer relationship, who is considered the principal? - ANS Insurer
Insurance contracts are aleatory in nature. What does that mean? - ANS Unequal values are
exchanged between the parties to a contract.
What are the methods of managing risk? - ANS Avoidance, transfer, sharing, retention, and
reduction
In insurance contracts, when does acceptance usually occur? - ANS When the insurer
approves a prepaid application
Wagering on a sporting event is known as what type of risk? - ANS Speculative
A situation in which a person can experience only a loss and no gain presents what type of risk?
1
- ANS Pure Risk
Page
@COPYRIGHT @THEBRIGHT 2025/2026
, What type of insurer is formed under the laws of another state? - ANS Foreign
When would a misrepresentation on an insurance application be considered fraud? -
ANS When it is intentional and material
According to the Law of Agency, who represents the principal? - ANS Agent or producer
What does indemnify mean in insurance? - ANS To restore an insured to the same financial
status as before a loss.
What is a warranty in an insurance contract? - ANS An absolutely true statement upon which
the validity of the policy depends.
What is the term for the causes of loss insured against in an insurance policy? - ANS Peril
What is a risk? - ANS Uncertainty of loss
If an insurer holds a Certificate of Authority, it is known as what type of insurer? -
ANS Authorized or Admitted
What is consideration in an insurance contract? - ANS Consideration is something of value
that each party gives to the other. Consideration on the part of the insurer is binding.
What is consideration on the part of the insurer? - ANS A promise to pay in the event of a
loss
2
A tornado that destroys a property would be an example of what? - ANS Peril
Page
@COPYRIGHT @THEBRIGHT 2025/2026
, What does the term reasonable expectations mean in insurance? - ANS Certain expectations
for coverage that a reasonable person would have based on sources other than just the policy
language.
Conditions that increase the chance of loss are known as what? - ANS Hazards
What provision states that if a policy allows for greater benefits than the financial loss incurred,
the insured may be compensated only for the amount lost? - ANS Indemnity
What are the three types of hazards? - ANS Physical, moral, and morale
What document is required for an insurance company to transact insurance? -
ANS Certificate of Authority
What does the term unilateral contract mean? - ANS A unilateral contract is a one-sided
contract. This means only one party makes an enforceable promise.
In insurance contracts, when is the offer usually made? - ANS When the insurance
application is submitted.
What are the three types of agent authority? - ANS Express, implied and apparent
Insurers are classified according to their domicile. What are the three types of insurers? -
ANS Domestic, foreign, and alien
What type of authority is based on the agent's actions, or words? - ANS Apparent
3
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@COPYRIGHT @THEBRIGHT 2025/2026
