IDAHO PROPERTY AND CASUALTY INSURANCE
EXAM EXAM SCRIPT 2026 COMPLETE EXAM
Q AND A GRADED A+
◉ Insurers may be classified according to their financial strength.
This includes all of the following factors EXCEPT...
A. Number of clients
B. Loss experience
C. Investment performance
D. Operating expenses. Answer: Number of clients
◉ An individual applied for auto insurance and obtained coverage
from ABC IC. Who is the 1st party in the contract?
A. The insured (customer)
B. The insurer (IC)
C. The agent
D. The insured and agent. Answer: A. The insured (customer)
◉ If a fire causes damage to a building, the fire is...
A. A Hazard
,B. A Peril
C. A Risk
D. An Exposure. Answer: B. A Peril
◉ Wearing a seatbelt in a car is an ex of which method of managing
risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer. Answer: C. Reduce
◉ Tiffany 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. Careless
D. Moral. Answer: Morale
◉ A flood is an example of....
A. A peril
B. A moral hazard
,C. A speculative risk
D. a physical hazard. Answer: A peril
◉ 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
◉ All of the following statements about a stock insurance company
are true EXCEPT
A. A stock co pays dividends to stockholders
B. A stock co is a participating co
C. A Stock co is a nonparticipating co
D. a stock co has shareholders. Answer: A stock company is a
participating company
◉ What do IC's 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 groups
D. Adverse Selection. Answer: The law of Large Numbers
◉ State require companies to have a license to sell insurance in the
state. The license is called...
A. A certificate of authority
B. A reinsurance license
C. A producer's license
D. An admittance license. Answer: A certificate of authority
◉ All of the following are requirements of an insurance pure risk
EXCEPT...
A. premiums must be calculable
B. premium must be affordable
C. the risk must be catastrophic for the insurance company
D. The loss must have been accidental. Answer: the risk must be
catastrophic for the insurance company
◉ Carl hands out a business card with his company's logo to all new
prospects that he meets at a golf outing. This is an example of...
EXAM EXAM SCRIPT 2026 COMPLETE EXAM
Q AND A GRADED A+
◉ Insurers may be classified according to their financial strength.
This includes all of the following factors EXCEPT...
A. Number of clients
B. Loss experience
C. Investment performance
D. Operating expenses. Answer: Number of clients
◉ An individual applied for auto insurance and obtained coverage
from ABC IC. Who is the 1st party in the contract?
A. The insured (customer)
B. The insurer (IC)
C. The agent
D. The insured and agent. Answer: A. The insured (customer)
◉ If a fire causes damage to a building, the fire is...
A. A Hazard
,B. A Peril
C. A Risk
D. An Exposure. Answer: B. A Peril
◉ Wearing a seatbelt in a car is an ex of which method of managing
risk?
A. Retain
B. Avoid
C. Reduce
D. Transfer. Answer: C. Reduce
◉ Tiffany 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. Careless
D. Moral. Answer: Morale
◉ A flood is an example of....
A. A peril
B. A moral hazard
,C. A speculative risk
D. a physical hazard. Answer: A peril
◉ 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
◉ All of the following statements about a stock insurance company
are true EXCEPT
A. A stock co pays dividends to stockholders
B. A stock co is a participating co
C. A Stock co is a nonparticipating co
D. a stock co has shareholders. Answer: A stock company is a
participating company
◉ What do IC's 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 groups
D. Adverse Selection. Answer: The law of Large Numbers
◉ State require companies to have a license to sell insurance in the
state. The license is called...
A. A certificate of authority
B. A reinsurance license
C. A producer's license
D. An admittance license. Answer: A certificate of authority
◉ All of the following are requirements of an insurance pure risk
EXCEPT...
A. premiums must be calculable
B. premium must be affordable
C. the risk must be catastrophic for the insurance company
D. The loss must have been accidental. Answer: the risk must be
catastrophic for the insurance company
◉ Carl hands out a business card with his company's logo to all new
prospects that he meets at a golf outing. This is an example of...
