General Insurance Agent Practice Questions With Answers

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General Insurance Agent Practice Questions With Answers - Quiz

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.


Questions and Answers
  • 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 

  • 2. 
    An accident is a specific, sudden and unforeseen event that results in damage.
    • A. 

      True

    • B. 

      False

  • 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

  • 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

  • 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

  • 6. 
    A deductible is an example of which risk management technique?
    • A. 

      Retain

    • B. 

      Reduce

    • C. 

      Avoid

    • D. 

      Transfer

  • 7. 
    Which one of the following best describes the homeowner's clogged dryer vents?
    • A. 

      Accident

    • B. 

      Peril

    • C. 

      Risk

    • D. 

      Hazard

  • 8. 
    Insurance is
    • A. 

      Avoiding the risk

    • B. 

      Transferring the risk

    • C. 

      Speculating the risk

    • D. 

      Retaining the risk

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 16. 
    Which of the following would be considered real property?
    • A. 

      Vehicle

    • B. 

      Dining room table

    • C. 

      Animals

    • D. 

      Barn

  • 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

  • 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

  • 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

  • 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 

  • 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

  • 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

  • 23. 
    The term that describes an agent exclusively representing only one insurer is called:
    • A. 

      Captive

    • B. 

      Independent

    • C. 

      Appointed

    • D. 

      Admitted

  • 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

  • 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

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