New York Adjuster Exam 2025
Questions and Answers
Insurance - --Answer --A method of handling pure risk, by spreading it over
a large number of similar individuals.
Law of Large Numbers - --Answer --Insurers can calculate their probable
losses and establish premium rates that are accurate enough to cover claims, pay
operating expenses, and make a profit.
Principle of Indemnity - --Answer --An insured who suffered a loss, should
only be restored to the approximate financial condition that existed prior to the
loss, no better and no worse.
Insurance Interest - --Answer --A person must have a lawful, substantial,
and economic interest in the life, health, property, or object being covered under
the insurance contract.
Risk - --Answer --The possibility that a loss might occur and is the reason
that people buy insurance.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, Pure Risk - --Answer --A situation where there is only the possibility of a
loss, there is never the possibility of a profit or financial gain.
Speculative Risk - --Answer --A situation where either a profit or loss is
possible.
Peril - --Answer --Actual cause of a loss, for example, fire, windstorm or
hail.
Hazard - --Answer --A condition that increases the possibility, of severity of
a loss.
Moral Hazard - --Answer --A condition that increases the probability that a
person will intentionally cause, create, or inflate a loss.
Morale Hazard - --Answer --A condition of inattention to, or disregard for
one's own life, health, property, or behavior, that increases the frequency or
severity of a loss.
Risk Avoidance - --Answer --Avoiding the hazard.
Transfer of Risk - --Answer --A person can transfer their risk to an
insurance company, in exchange for paying a premium.
Contract - --Answer --An agreement between two or more parties that is
enforceable by law.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
Questions and Answers
Insurance - --Answer --A method of handling pure risk, by spreading it over
a large number of similar individuals.
Law of Large Numbers - --Answer --Insurers can calculate their probable
losses and establish premium rates that are accurate enough to cover claims, pay
operating expenses, and make a profit.
Principle of Indemnity - --Answer --An insured who suffered a loss, should
only be restored to the approximate financial condition that existed prior to the
loss, no better and no worse.
Insurance Interest - --Answer --A person must have a lawful, substantial,
and economic interest in the life, health, property, or object being covered under
the insurance contract.
Risk - --Answer --The possibility that a loss might occur and is the reason
that people buy insurance.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, Pure Risk - --Answer --A situation where there is only the possibility of a
loss, there is never the possibility of a profit or financial gain.
Speculative Risk - --Answer --A situation where either a profit or loss is
possible.
Peril - --Answer --Actual cause of a loss, for example, fire, windstorm or
hail.
Hazard - --Answer --A condition that increases the possibility, of severity of
a loss.
Moral Hazard - --Answer --A condition that increases the probability that a
person will intentionally cause, create, or inflate a loss.
Morale Hazard - --Answer --A condition of inattention to, or disregard for
one's own life, health, property, or behavior, that increases the frequency or
severity of a loss.
Risk Avoidance - --Answer --Avoiding the hazard.
Transfer of Risk - --Answer --A person can transfer their risk to an
insurance company, in exchange for paying a premium.
Contract - --Answer --An agreement between two or more parties that is
enforceable by law.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
