Tennessee Property & Casualty Exam
Complete Questions and Guide Answers
100% Verified Graded A+
1. 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:
Answer: The insured (customer)
2. If a fire causes damge to a building the fire is
A. a hazard
B. a peril
,C. a risk
D. an exposure:
Answer: A peril
3. Wearing a seatbelt in a car is an example if which method of managing risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer:
Answer: Reduce
4. 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:
, Answer: Morale
5. A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard:
Answer: Peril
6. 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
C. Foreign
D. Nonadmitted:
Answer: Foreign
7. 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:
Answer: stock company is a participating company
8. 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:
Answer: The law of large numbers
9. State requires companies to have a license to sell insurance in the state. The license is
called:
A. a certificate of authority
Complete Questions and Guide Answers
100% Verified Graded A+
1. 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:
Answer: The insured (customer)
2. If a fire causes damge to a building the fire is
A. a hazard
B. a peril
,C. a risk
D. an exposure:
Answer: A peril
3. Wearing a seatbelt in a car is an example if which method of managing risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer:
Answer: Reduce
4. 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:
, Answer: Morale
5. A flood is an example of
A. a peril
B. a moral hazard
C. a speculative risk
D. a physical hazard:
Answer: Peril
6. 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
C. Foreign
D. Nonadmitted:
Answer: Foreign
7. 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:
Answer: stock company is a participating company
8. 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:
Answer: The law of large numbers
9. State requires companies to have a license to sell insurance in the state. The license is
called:
A. a certificate of authority
