General Insurance Agent Practice Questions With Answers
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Are you a general insurance agent, or do you want to become one? If so, check out these practice questions with answers and make your understanding better regarding this concept. All questions are from the latest syllabus and cover general insurance all topics. These agents sell insurance products to other insurance brokers or agents and then sell these products to individuals or companies. Shall we begin the quiz now? Play it out and try to learn everything if possible.
- 1.
Risk is
- A.
An increased chance of loss
- B.
Being uncertain about a future outcome
- C.
The cause of the loss
- D.
A financial stake in the property
Correct Answer
B. Being uncertain about a future outcomeExplanation
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- 2.
An accident is a specific, sudden and unforeseen event that results in damage.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Chapter 2Rate this question:
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- 3.
Which one of the following is NOT true about insurable interest?
- A.
Must have financial interest in the property at the time you purchased the policy
- B.
Must have insurance on the property that was in the loss
- C.
Must not gain financially from the loss to the property that is insured
- D.
Must have financial interest in the property at the time of the loss
Correct Answer
A. Must have financial interest in the property at the time you purchased the policyExplanation
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- 4.
When an insured is returned to the same financial condition after the loss or made whole again, this is referred to as
- A.
Indemnity
- B.
Subrogation
- C.
Reimbursement
- D.
Waiver
Correct Answer
A. IndemnityExplanation
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- 5.
An insurance company falls under which status when doing business in a state where they were incorporated?
- A.
Domestic
- B.
Foreign
- C.
Alien
- D.
Non-admitted
Correct Answer
A. DomesticExplanation
Chapter 2Rate this question:
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- 6.
A deductible is an example of which risk management technique?
- A.
Retain
- B.
Reduce
- C.
Avoid
- D.
Transfer
Correct Answer
A. RetainExplanation
Chapter 2Rate this question:
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- 7.
Which one of the following best describes the homeowner's clogged dryer vents?
- A.
Accident
- B.
Peril
- C.
Risk
- D.
Hazard
Correct Answer
D. HazardExplanation
The homeowner's clogged dryer vents can be described as a hazard. A hazard refers to a potential source of danger or harm. In this case, the clogged dryer vents pose a risk of fire hazard due to the accumulation of lint and restricted airflow. This can lead to overheating and potentially cause a fire. Therefore, the clogged dryer vents can be considered a hazard that needs to be addressed to ensure safety.Rate this question:
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- 8.
Insurance is
- A.
Avoiding the risk
- B.
Transferring the risk
- C.
Speculating the risk
- D.
Retaining the risk
Correct Answer
B. Transferring the riskExplanation
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- 9.
Dawn owns a shoe store and a fire occurs because of an overheated extension cord. The fireman come to put the fire out and they break the front windows to get the hose into the store. Dawn arrives to see her shoes displayed in the front window ripped by the glass and soaking wet. The shoes ripped by the glass is an example of a/an
- A.
Excluded Loss
- B.
Indirect Loss
- C.
Direct Loss
- D.
Physical Loss
Correct Answer
C. Direct LossExplanation
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- 10.
The term that identifies an agent who is authorized to represent more than one insurance company is known as
- A.
Captive
- B.
Independent
- C.
Appointed
- D.
Admitted
Correct Answer
B. IndependentExplanation
Chapter 2Rate this question:
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- 11.
Installing an ADT alarm system in your home is an example of which risk management technique?
- A.
Transfer
- B.
Share
- C.
Retain
- D.
Reduce
Correct Answer
D. ReduceExplanation
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- 12.
Lightning hits a power line causing it to catch fire and fall on the house. The house catches fire and burns down to the ground. The insured must stay in a hotel while the house is being rebuilt. Which one of the following is the indirect loss?
- A.
The lightning
- B.
The burning power line
- C.
The burning house
- D.
The hotel
Correct Answer
D. The hotelExplanation
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- 13.
The insured sustained a large amount of damage to their living room from a candle that was accidentally knocked over by the cat. Fire, also known as the cause of loss, would be considered a/an
- A.
Exposure
- B.
Hazard
- C.
Peril
- D.
Risk
Correct Answer
C. PerilExplanation
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- 14.
Which one of the following would be considered a morale hazard?
- A.
A couple that lives in a beach house
- B.
A person in poor financial condition
- C.
A person using their vehicle to transport clients
- D.
A person that leaves oily rags next to a kerosene heater
Correct Answer
D. A person that leaves oily rags next to a kerosene heaterExplanation
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- 15.
Which one of the following would be considered persons insured under an insurance policy?
- A.
A friend living with the insured for two months
- B.
The neighbor living across the street from the insured
- C.
A 17 year old child of the insured that is unlicensed
- D.
Someone that comes in to clean the insured's house twice a month
Correct Answer
C. A 17 year old child of the insured that is unlicensedExplanation
The 17 year old child of the insured that is unlicensed would be considered a person insured under an insurance policy because they are a family member of the insured.Rate this question:
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- 16.
Which of the following would be considered real property?
- A.
Vehicle
- B.
Dining room table
- C.
Animals
- D.
Barn
Correct Answer
D. BarnExplanation
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- 17.
Which of the following will only cover perils listed on the policy?
- A.
Open Perils
- B.
Named Perils
- C.
All Risk Perils
- D.
Special Perils
Correct Answer
B. Named PerilsExplanation
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- 18.
Which of the following is NOT a nonresident agent requirement in Massachusetts?
- A.
Be in good standing with their home state
- B.
Submit an application
- C.
Take the Virginia licensing examination
- D.
Home state must award nonresident license on same basis
Correct Answer
C. Take the Virginia licensing examinationExplanation
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- 19.
Which of the following is NOT correct regarding agent appointments?
- A.
Agents are appointed to solicit for an insurer
- B.
Agent license remains active without an appointment
- C.
Insurer must appoint an agent within 15 days of a sale
- D.
The Commissioner notifies an agent of appointment termination
Correct Answer
D. The Commissioner notifies an agent of appointment terminationExplanation
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- 20.
Mutual insurers are:
- A.
Owned by policyholders and formed to earn a profit
- B.
Owned by stockholders and formed to provide them insurance
- C.
Owned by stockholders for the purpose of earning a profit
- D.
Owned by policyholder to provide them insurance
Correct Answer
D. Owned by policyholder to provide them insuranceExplanation
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- 21.
The type of insurance that allows a primary insurer to transfer their losses to another is called:
- A.
Admitted insurance
- B.
Reinsurance
- C.
Non-admitted insrance
- D.
Surplus lines insurance
Correct Answer
B. ReinsuranceExplanation
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- 22.
How many days does an agent have to report a change in residency to the Commissioner?
- A.
5 days
- B.
10 days
- C.
30 days
- D.
60 days
Correct Answer
C. 30 daysExplanation
Chapter 1Rate this question:
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- 23.
The term that describes an agent exclusively representing only one insurer is called:
- A.
Captive
- B.
Independent
- C.
Appointed
- D.
Admitted
Correct Answer
A. CaptiveExplanation
Chapter 2Rate this question:
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- 24.
An insurer operating in a state where they were not incorporated is called:
- A.
Domestic Insurer
- B.
Foreign Insurer
- C.
Alien Insurer
- D.
Admitted Insurer
Correct Answer
B. Foreign InsurerExplanation
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- 25.
The directive that states the violation an agent committed requiring them to stop the illegal activity is called
- A.
Show Cause Order
- B.
Subpoena
- C.
Tort
- D.
Cease and Desist Order
Correct Answer
D. Cease and Desist OrderExplanation
A Cease and Desist Order is a directive that is issued by a regulatory agency or a court to an individual or organization involved in illegal activities. It requires them to immediately stop the specified illegal activity. This order is used to prevent further harm or damage caused by the violation and is an official warning that legal action may be taken if the activity continues.Rate this question:
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- 26.
Which marketing distribution uses captive agents and is restricted to representing only a single insurer?
- A.
Exclusive
- B.
Group marketing
- C.
Direct writer
- D.
Omnichannel
Correct Answer
A. ExclusiveExplanation
Chapter 2Rate this question:
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- 27.
An individual appointed by an insurer to sell, solicit, or negotiate policies on its behalf is known as
- A.
An adjuster
- B.
A Producer
- C.
A Consultant
- D.
A Underwriter
Correct Answer
B. A ProducerExplanation
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- 28.
Lieutenant Insurance Company guarantees in their commercials that you "WILL" save 20% by switching to their company. Several customers have complained that they did NOT save 20% by switching to the Lieutenant Insurance Company. The Lieutenant Insurance Company could be found guilty of:
- A.
Rebating
- B.
False Advertising
- C.
Defamation
- D.
Unfair Discrimination
Correct Answer
B. False AdvertisingExplanation
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- 29.
Overall authority of an insurance agent includes:
- A.
Examined Authority
- B.
Absolute Authority
- C.
Required Authority
- D.
Implied Authority
Correct Answer
D. Implied AuthorityExplanation
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- 30.
The Insurance Commissioner is empowered to
- A.
Pass state laws relating to insurance
- B.
Write policy forms for mandatory insurance coverage
- C.
Set rates for mandatory insurance coverage
- D.
Enforce state laws relating to insurance
Correct Answer
D. Enforce state laws relating to insuranceExplanation
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- 31.
Which of the following is a federal law that regulates the collection, distribution and use of the consumer's credit information for underwriting purposes?
- A.
Property and Casualty Insurance Act
- B.
Insurance Credit Protection Act
- C.
Gramm-Leach-Bliley Act
- D.
Fair Credit Reporting Act
Correct Answer
D. Fair Credit Reporting ActExplanation
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- 32.
If an agent lies to a client about the policy's terms and conditions, they may be found guilty of:
- A.
False Advertising
- B.
Rebating
- C.
Misrepresentation
- D.
Defamation
Correct Answer
C. MisrepresentationExplanation
Chapter 1Rate this question:
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- 33.
How much notice needs to be given to the agent by the Commissioner for examining their records?
- A.
No notice needs to be given
- B.
1 year
- C.
30 days
- D.
3 years
Correct Answer
A. No notice needs to be givenExplanation
Chapter 1Rate this question:
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- 34.
When an individual purchases insurance as a result of threats made by the agent, they have violated the:
- A.
Personal Injury Regulations
- B.
Unfair Claims Practice Laws
- C.
Personal Protection Regulations
- D.
Unfair Trade Practice Laws
Correct Answer
D. Unfair Trade Practice LawsExplanation
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- 35.
When an agent is acting within the scope of authority granted in an agency contract, the insurer:
- A.
Transfers all liability of the agents acts to the state
- B.
Is not responsible when the agent makes misrepresentations
- C.
Is responsible for the agents acts that are based on expressed authority only
- D.
Is responsible for everything the agents does even if it is outside of the agent's contract
Correct Answer
C. Is responsible for the agents acts that are based on expressed authority onlyExplanation
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- 36.
Reinstatement of a terminated license for nonrenewing or not complying with continuing education may be done:
- A.
Immediately
- B.
Within 30 days of renewal date
- C.
Within 6 months of renewal date
- D.
Within 12 months of renewal date
Correct Answer
D. Within 12 months of renewal dateExplanation
Chapter 1Rate this question:
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May 12, 2023Quiz Edited by
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Apr 19, 2022Quiz Created by
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