KY Property & Casualty Insurance Final Exam Spring
2023 Verfied
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard
Hazard
When a person buys insurance what method of handling risk has been
undertaken?
a) transfer
b) reduction
c) avoidance
d) retention
Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation
At the time of loss
All of the following actions by a person could be described as a risk avoidance
EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year
Investing in the stock market
Which of the following insurance options would be considered a risk-sharing
arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal
Reciprocal
Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard
Moral hazard
What do individuals use to transfer their risk of loss to a larger group?
a) insurable interest
b) exposure
, c) indemnity
d) insurance
Insurance
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become:
a) more active
b) larger
c) smaller
d) older
Larger
What type of insurance policy insures against all risks of loss that are not
specifically excluded by the policy?
a) binder policy
b) named peril policy
c) open peril policy
d) specified peril policy
Open peril policy
Insurance is the transfer of:
a) peril
b) risk
c) loss
d) hazard
Risk
Which one of the following is NOT an element of insurability?
a) loss must be expected
b) risk of loss is speculative
c) loss is calculable
d) risk of loss must represent a financial hardship
Risk of loss is speculative
All of the following are examples of hazards EXCEPT:
a) a fire in the kitchen of a home
b) trash or debris in the basement of a home
c) faulty wiring in a home
d) broken step or hand railing on the porch
A fire in the kitchen of a home
What hazard would you be concerned about if you lived next to an explosive
contractor?
a) morale
b) dangerous
c) physical
d) moral
Physical
When a homeowner purchases insurance on his home, what risk management
technique is he or she practicing?
a) retention
2023 Verfied
Faulty wiring in a home is an example of a:
a) loss
b) peril
c) risk
d) hazard
Hazard
When a person buys insurance what method of handling risk has been
undertaken?
a) transfer
b) reduction
c) avoidance
d) retention
Transfer
In property and casualty insurance, insurable interest must exist:
a) at the time a change is made to a policy
b) at the time of policy application
c) at the time of loss
d) at the time of policy solicitation
At the time of loss
All of the following actions by a person could be described as a risk avoidance
EXCEPT:
a) investing in the stock market
b) refusing to scuba dive
c) never flying in an airplane
d) taking a flu shot each year
Investing in the stock market
Which of the following insurance options would be considered a risk-sharing
arrangement ?
a) stock
b) mutual
c) surplus lines
d) reciprocal
Reciprocal
Illegal use of narcotics would be an example of:
a) pure hazard
b) morale hazard
c) moral hazard
d) physical hazard
Moral hazard
What do individuals use to transfer their risk of loss to a larger group?
a) insurable interest
b) exposure
, c) indemnity
d) insurance
Insurance
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become:
a) more active
b) larger
c) smaller
d) older
Larger
What type of insurance policy insures against all risks of loss that are not
specifically excluded by the policy?
a) binder policy
b) named peril policy
c) open peril policy
d) specified peril policy
Open peril policy
Insurance is the transfer of:
a) peril
b) risk
c) loss
d) hazard
Risk
Which one of the following is NOT an element of insurability?
a) loss must be expected
b) risk of loss is speculative
c) loss is calculable
d) risk of loss must represent a financial hardship
Risk of loss is speculative
All of the following are examples of hazards EXCEPT:
a) a fire in the kitchen of a home
b) trash or debris in the basement of a home
c) faulty wiring in a home
d) broken step or hand railing on the porch
A fire in the kitchen of a home
What hazard would you be concerned about if you lived next to an explosive
contractor?
a) morale
b) dangerous
c) physical
d) moral
Physical
When a homeowner purchases insurance on his home, what risk management
technique is he or she practicing?
a) retention
