← Risk & Underwriting – P&C Insurance License Exam

Free Risk & Underwriting – P&C Insurance License Exam Practice Test (2026)

150 questions · 180 min · 70% to pass

150 Questions · 180 Minutes · 70% to Pass

Question 1 of 5

Sample Questions

Question 1

Which category of risk refers to risks that remain relatively constant over time, such as fire or theft?

Answer: Static risks. Unlike dynamic risks (which change with economic or social conditions), static risks are tied to natural events or human behavior and are more predictable.

Question 2

List four characteristics that make a risk insurable.

Answer: An insurable risk must be: (1) due to chance, (2) definite and measurable, (3) statistically predictable (large numbers of similar exposure units), and (4) not catastrophic to the insurer.

Question 3

What is a 'particular risk,' as opposed to a 'fundamental risk'?

Answer: A particular risk affects only individuals or small groups (e.g., a house fire), whereas a fundamental risk affects large segments of society (e.g., earthquakes or war).

Question 4

What term describes a risk that presents only the possibility of loss, with no chance of gain?

Answer: A pure risk. Pure risks are the only type insurable because they involve only the chance of loss or no loss, never a gain.

Question 5

What type of risk involves the possibility of either loss OR gain, such as investing in the stock market?

Answer: Speculative risk. Speculative risks are generally not insurable because they include the possibility of financial gain.