1. Statements made in the application are considered: B. Representations
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above
2. The definition of Risk is: A. Uncertainty regarding
A. Uncertainty regarding loss loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unforseen damage to property for gain or
profit
3. A financial device for transferring or shifting risk from D. Insurance
an individual or entity to a large group with the same
risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance
4. Hazards include which of the following: C. Both 1 & 2
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insur-
ance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2
5. The mortgage condition in a property policy: C. Both 1 & 2
1. Guarantees that the lending institutions may act for
, itself in paying a premium
2. Guarantees claim payments will be divided as the
interests of the insurance and mortgagee appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2
6. Which of the following situations does NOT create an A. Being named in
insurable interest? some- one's will as an
A. Being named in someone's will as an heir heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's proper-
ty
D. Owning property
7. The plumbing in Mrs. Ward's home suddenly burst
and the ceilings were damaged by water. Which of the B. HO2
following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7`
8. Nicole has a Personal Auto policy with limits of
10/20/10 for liability coverage. She causes an accident A. $15,000
that results in $12,000 bodily injury damages to the
other driver and $5,000 in property damage to the
other driver's car. How much would Nicole's policy pay
for the the BI and PD losses?
b b
, A. $15,000
B. $17,000
C. $10,000
D. $12,000
9. Sally Smith calls her agent, Hubert Dufus, to purchase A.Write your own program
b b b b b b b b b b b b b
flood insurance. Agent Dufus explains to Ms. Smith
b b b b b b b
bthat flood coverage can be purchased directly through
b b b b b b b
bthe NFIP or through him. Should Ms. Smith choose
b b b b b b b b
to purchase coverage through Agent Dufus it is
b b b b b b b
bcalled the: b
A. Write your own program b b b
B. Create flood insurance program b b b
C. Flood insurance is not available through private in-
b b b b b b b
surers
b
D. None of the Above b b b
10. The law of large numbers state that the larger...
b b b b b b b b D. The number of in-
b b b b
sureds, the easier it is to
b b b b b b
A. The number of insured, the more likely they will have estimate their losses
b b b b b b b b b b
b b
losses
B. A company, the more profit it will make
b b b b b b b
C. The chance of loss, the higher the premium
b b b b b b b
D. The number of insureds, the easier it is to
b b b b b b b b
bestimate their losses b b
11. A sudden, unintended, and unexpected event is known C. Accident
b b b b b b b b b
as:
A. Negligence
B. Warranty
b b
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above
2. The definition of Risk is: A. Uncertainty regarding
A. Uncertainty regarding loss loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unforseen damage to property for gain or
profit
3. A financial device for transferring or shifting risk from D. Insurance
an individual or entity to a large group with the same
risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance
4. Hazards include which of the following: C. Both 1 & 2
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insur-
ance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2
5. The mortgage condition in a property policy: C. Both 1 & 2
1. Guarantees that the lending institutions may act for
, itself in paying a premium
2. Guarantees claim payments will be divided as the
interests of the insurance and mortgagee appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2
6. Which of the following situations does NOT create an A. Being named in
insurable interest? some- one's will as an
A. Being named in someone's will as an heir heir
B. Holding a mortgage or lien on property
C. Having custody or control of someone else's proper-
ty
D. Owning property
7. The plumbing in Mrs. Ward's home suddenly burst
and the ceilings were damaged by water. Which of the B. HO2
following homeowner forms would cover the loss?
A. HO1
B. HO2
C. HO4
D. HO7`
8. Nicole has a Personal Auto policy with limits of
10/20/10 for liability coverage. She causes an accident A. $15,000
that results in $12,000 bodily injury damages to the
other driver and $5,000 in property damage to the
other driver's car. How much would Nicole's policy pay
for the the BI and PD losses?
b b
, A. $15,000
B. $17,000
C. $10,000
D. $12,000
9. Sally Smith calls her agent, Hubert Dufus, to purchase A.Write your own program
b b b b b b b b b b b b b
flood insurance. Agent Dufus explains to Ms. Smith
b b b b b b b
bthat flood coverage can be purchased directly through
b b b b b b b
bthe NFIP or through him. Should Ms. Smith choose
b b b b b b b b
to purchase coverage through Agent Dufus it is
b b b b b b b
bcalled the: b
A. Write your own program b b b
B. Create flood insurance program b b b
C. Flood insurance is not available through private in-
b b b b b b b
surers
b
D. None of the Above b b b
10. The law of large numbers state that the larger...
b b b b b b b b D. The number of in-
b b b b
sureds, the easier it is to
b b b b b b
A. The number of insured, the more likely they will have estimate their losses
b b b b b b b b b b
b b
losses
B. A company, the more profit it will make
b b b b b b b
C. The chance of loss, the higher the premium
b b b b b b b
D. The number of insureds, the easier it is to
b b b b b b b b
bestimate their losses b b
11. A sudden, unintended, and unexpected event is known C. Accident
b b b b b b b b b
as:
A. Negligence
B. Warranty
b b
