FIRST PUBLISH OCTOBER 2024
P&C License Exam – Missouri Questions
and Answers
Moral Hazard - Ans:✔✔-dishonesty or character defects in an individual that increase the chance of loss,
ex: lying on app or faking a loss
Morale Hazard - Ans:✔✔-carelessness or indifference to a loss because of the existence of insurance, ex:
leaving door unlocked
Parts of an Insurance Policy (5 Sections) - Ans:✔✔-D-I-C-E-E
Declarations
Insuring Agreements
Conditions
Endorsements
Exclusions
Declarations Section - Ans:✔✔--who what when and where
-name, location of residence, policy period, coverages, limits of liability, deductibles
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FIRST PUBLISH OCTOBER 2024
Insuring Agreement Section - Ans:✔✔--describes the covered perils
-summarizes major promises of the policy
Conditions Section - Ans:✔✔--policy provisions
-rules of conduct
-duties
-obligations
Endorsements Section - Ans:✔✔--add, modify, or take away coverage
The self retention limit - Ans:✔✔-the amt of a loss that the insured must cover out of pocket, acts as a
deductible unless the umbrella policy covers the excess liabilities
Insurance uses the risk MGT method of ________ to spread the risk among insureds - Ans:✔✔-Transfer
The tendency for higher-risk individuals to get and keep insurance. This can be avoided using the
underwriting process, where insurance companies can identify high risk individuals. - Ans:✔✔-Adverse
Selection
Mutual Insurer - Ans:✔✔-An insurer that is owned by its policyholders, elects its own board of directors,
and provides insurance to them. The policyowners participate in the operating results of the company so
they are "PARTICIPATING POLICIES"
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