AD BANKER PROPERTY AND CASUALTY
COMPREHENSIVE EXAM STUDY GUIDE 2026
COMPLETE QUESTIONS WITH CORRECT
DETAILED ANSWERS || 100% GUARANTEED
PASS <RECENT VERSION>
1. What is the definition of risk?
A. The cause of a loss
B. The uncertainty or chance of a loss occurring
C. The termination of an insurance policy
D. The amount paid for an insurance policy
Answer: B
2. Which risk management technique involves accepting the
consequences of a risk?
A. Avoidance
B. Retention
C. Transfer
D. Reduction
Answer: B
3. What is the term for a condition that increases the likelihood of a
loss?
A. Peril
B. Hazard
C. Risk
,D. Indemnity
Answer: B
4. The principle of Indemnity states that:
A. The insured should not profit from a loss.
B. The insurer must defend the insured in all cases.
C. The insured must have a financial interest in the property.
D. The contract must be in writing.
Answer: A
5. What is the purpose of a deductible in an insurance policy?
A. To eliminate all risk for the insurer
B. To reduce moral hazard and share costs with the insured
C. To pay the agent's commission
D. To increase the policy limits
Answer: B
6. A representation in an insurance application is considered:
A. A guaranteed statement of fact.
B. A statement that is believed to be true.
C. A fraudulent statement.
D. A legally binding amendment to the policy.
Answer: B
7. Concealment is best defined as:
A. An unintentional oversight on the application.
B. An intentional failure to disclose a material fact.
C. A legal defense for the insured.
D. A type of warranty.
Answer: B
, 8. What element is necessary for a risk to be ideally insurable?
A. The loss must be intentional.
B. The loss must be catastrophic to the entire economy.
C. The loss must be measurable and definite.
D. The chance of loss must be 100%.
Answer: C
9. Which doctrine requires that the insurer must prove all elements of
a fraud claim?
A. Utmost Good Faith
B. Reasonable Expectations
C. Adhesion
D. Waiver and Estoppel
Answer: A
10. An insurance contract is considered a contract of adhesion. This
means:
A. It is negotiated equally by both parties.
B. One party (the insurer) prepares the contract, and the other (the
insured) must accept it as is.
C. It is only valid if signed by all parties.
D. It requires consideration to be valid.
Answer: B
11. What is the term for the exchange of value in an insurance
contract?
A. Offer and Acceptance
B. Consideration
C. Legal Purpose
COMPREHENSIVE EXAM STUDY GUIDE 2026
COMPLETE QUESTIONS WITH CORRECT
DETAILED ANSWERS || 100% GUARANTEED
PASS <RECENT VERSION>
1. What is the definition of risk?
A. The cause of a loss
B. The uncertainty or chance of a loss occurring
C. The termination of an insurance policy
D. The amount paid for an insurance policy
Answer: B
2. Which risk management technique involves accepting the
consequences of a risk?
A. Avoidance
B. Retention
C. Transfer
D. Reduction
Answer: B
3. What is the term for a condition that increases the likelihood of a
loss?
A. Peril
B. Hazard
C. Risk
,D. Indemnity
Answer: B
4. The principle of Indemnity states that:
A. The insured should not profit from a loss.
B. The insurer must defend the insured in all cases.
C. The insured must have a financial interest in the property.
D. The contract must be in writing.
Answer: A
5. What is the purpose of a deductible in an insurance policy?
A. To eliminate all risk for the insurer
B. To reduce moral hazard and share costs with the insured
C. To pay the agent's commission
D. To increase the policy limits
Answer: B
6. A representation in an insurance application is considered:
A. A guaranteed statement of fact.
B. A statement that is believed to be true.
C. A fraudulent statement.
D. A legally binding amendment to the policy.
Answer: B
7. Concealment is best defined as:
A. An unintentional oversight on the application.
B. An intentional failure to disclose a material fact.
C. A legal defense for the insured.
D. A type of warranty.
Answer: B
, 8. What element is necessary for a risk to be ideally insurable?
A. The loss must be intentional.
B. The loss must be catastrophic to the entire economy.
C. The loss must be measurable and definite.
D. The chance of loss must be 100%.
Answer: C
9. Which doctrine requires that the insurer must prove all elements of
a fraud claim?
A. Utmost Good Faith
B. Reasonable Expectations
C. Adhesion
D. Waiver and Estoppel
Answer: A
10. An insurance contract is considered a contract of adhesion. This
means:
A. It is negotiated equally by both parties.
B. One party (the insurer) prepares the contract, and the other (the
insured) must accept it as is.
C. It is only valid if signed by all parties.
D. It requires consideration to be valid.
Answer: B
11. What is the term for the exchange of value in an insurance
contract?
A. Offer and Acceptance
B. Consideration
C. Legal Purpose
