Ohio Property and Casualty Exam questions with correct answers

What do individuals use to transfer their risk of loss to a larger group? CORRECT ANSWER Insurance What are the four elements of an insurance contract? CORRECT ANSWER Agreement (Offer and Acceptance), Consideration, Competent parties, and legal purpose. In the agent/insurer relationship, who is considered the principal? CORRECT ANSWER Insurer Insurance contracts are aleatory in nature. What does that mean? CORRECT ANSWER Unequal values are exchanged between the parties to a contract. What are the methods of managing risk? CORRECT ANSWER Avoidance, transfer, sharing, retention, and reduction In insurance contracts, when does acceptance usually occur? CORRECT ANSWER When the insurer approves a prepaid application Wagering on a sporting event is known as what type of risk? CORRECT ANSWER Speculative A situation in which a person can experience only a loss and no gain presents what type of risk? CORRECT ANSWER Pure Risk What type of insurer is formed under the laws