KY Property & Casualty Insurance
Exam Questions and Responses
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard - CORRECT ANSWERS-Hazard
When a person buys insurance what method of handling risk has been undertaken?
a) transfer
b) reduction
c) avoidance
d) retention - CORRECT ANSWERS-Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation - CORRECT ANSWERS-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 - CORRECT ANSWERS-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 - CORRECT ANSWERS-Reciprocal
Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard - CORRECT ANSWERS-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 - CORRECT ANSWERS-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
c) smaller
d) older - CORRECT ANSWERS-Larger
What type of insurance policy insures against all risks of loss that are not specifically excluded
by the policy?
a) binder policy
b) named peril policy
c) open peril policy
d) specified peril policy - CORRECT ANSWERS-Open peril policy
Insurance is the transfer of:
a) peril
b) risk
c) loss
d) hazard - CORRECT ANSWERS-Risk
Exam Questions and Responses
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard - CORRECT ANSWERS-Hazard
When a person buys insurance what method of handling risk has been undertaken?
a) transfer
b) reduction
c) avoidance
d) retention - CORRECT ANSWERS-Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation - CORRECT ANSWERS-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 - CORRECT ANSWERS-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 - CORRECT ANSWERS-Reciprocal
Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard - CORRECT ANSWERS-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 - CORRECT ANSWERS-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
c) smaller
d) older - CORRECT ANSWERS-Larger
What type of insurance policy insures against all risks of loss that are not specifically excluded
by the policy?
a) binder policy
b) named peril policy
c) open peril policy
d) specified peril policy - CORRECT ANSWERS-Open peril policy
Insurance is the transfer of:
a) peril
b) risk
c) loss
d) hazard - CORRECT ANSWERS-Risk
