KY Property and Casualty Exam
Practice Questions and Answers
Which of the following would you have an insurable interest? - CORRECT ANSWERS-Both
House you own but have rented to a tenant
Car on which you are still paying
Insurance is a means of
a. eliminating risk
b. transferring risk
c. avoiding risk
d. retaining risk - CORRECT ANSWERS-transferring risk
Which of the following is an insurable risk?
a. wear and tear on a valuable rug
b. theft of a paperback book
c. hail damage to the roof of a car
d. all of the above - CORRECT ANSWERS-c. hail damage to the roof of a car
A peril is
a. the uncertainty of loss
b. the cause of loss
c. something that increases the chance of loss
d. the result of a loss - CORRECT ANSWERS-b. the cause of loss
A morale hazard - CORRECT ANSWERS-Arises through an individual's carelessness or
irresponsible actions
All of the following are parts of an insurance contract EXCEPT
a. floater
b. insuring agreement
c. conditions
, d. exclusions - CORRECT ANSWERS-a. floater
The insurance contract is considered a contract of indemnity because - CORRECT ANSWERS-an
insured may collect no more than the amount required to restore him or her to the same
financial condition that existed prior to the loss
Which of the following is NOT one of the required elements of a legal contract?
a. offer and acceptance
b. competent parties
c. legal purpose
d. written instrument - CORRECT ANSWERS-d. written instrument
Which of the elements of a legal contract does an insurance premium payment represent?
a. consideration
b. acceptance
c. legal instrument
d. offer - CORRECT ANSWERS-a. consideration
An insurance policy is considered a unilateral contract because - CORRECT ANSWERS-the
insurance company is the only party that is legally obligated to perform under the insurance
contract
What constitutes an agreement to enter into a valid contract?
a. an unconditional and unilateral promise to perform a duty
b. an exchange of consideration
c. an exercise of utmost good faith in disclosing all pertinent information
d. a specific offer by one party and acceptance by the other - CORRECT ANSWERS-d. a specific
offer by one party and acceptance by the other
A nonexclusive agent
a. represents only direct writers
b. works for a solicitor
c. represents more than one insurance company
d. is a captive agent - CORRECT ANSWERS-c. represents more than one insurance company
Practice Questions and Answers
Which of the following would you have an insurable interest? - CORRECT ANSWERS-Both
House you own but have rented to a tenant
Car on which you are still paying
Insurance is a means of
a. eliminating risk
b. transferring risk
c. avoiding risk
d. retaining risk - CORRECT ANSWERS-transferring risk
Which of the following is an insurable risk?
a. wear and tear on a valuable rug
b. theft of a paperback book
c. hail damage to the roof of a car
d. all of the above - CORRECT ANSWERS-c. hail damage to the roof of a car
A peril is
a. the uncertainty of loss
b. the cause of loss
c. something that increases the chance of loss
d. the result of a loss - CORRECT ANSWERS-b. the cause of loss
A morale hazard - CORRECT ANSWERS-Arises through an individual's carelessness or
irresponsible actions
All of the following are parts of an insurance contract EXCEPT
a. floater
b. insuring agreement
c. conditions
, d. exclusions - CORRECT ANSWERS-a. floater
The insurance contract is considered a contract of indemnity because - CORRECT ANSWERS-an
insured may collect no more than the amount required to restore him or her to the same
financial condition that existed prior to the loss
Which of the following is NOT one of the required elements of a legal contract?
a. offer and acceptance
b. competent parties
c. legal purpose
d. written instrument - CORRECT ANSWERS-d. written instrument
Which of the elements of a legal contract does an insurance premium payment represent?
a. consideration
b. acceptance
c. legal instrument
d. offer - CORRECT ANSWERS-a. consideration
An insurance policy is considered a unilateral contract because - CORRECT ANSWERS-the
insurance company is the only party that is legally obligated to perform under the insurance
contract
What constitutes an agreement to enter into a valid contract?
a. an unconditional and unilateral promise to perform a duty
b. an exchange of consideration
c. an exercise of utmost good faith in disclosing all pertinent information
d. a specific offer by one party and acceptance by the other - CORRECT ANSWERS-d. a specific
offer by one party and acceptance by the other
A nonexclusive agent
a. represents only direct writers
b. works for a solicitor
c. represents more than one insurance company
d. is a captive agent - CORRECT ANSWERS-c. represents more than one insurance company
