Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with flashcards and multiple choice questions, each offering hints and explanations. Equip yourself for your test confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What type of hazard is demonstrated by Lewis' behavior in his computer store?

Fraud
Morale hazard
Physical hazard
Moral hazard

The correct answer is: Morale hazard

The scenario presented in this question suggests that Lewis may be taking advantage of his own insurance coverage by engaging in risky behavior, such as not properly securing the store or leaving valuable items out in the open. This type of behavior is commonly known as "moral hazard," which is when someone has insurance coverage and engages in behaviors that increase the likelihood of a claim in order to benefit from the insurance payout. Options A, C, and D are all incorrect as they do not accurately describe the behavior demonstrated by Lewis in the scenario. Fraud is a deliberate act to deceive others for personal gain, physical hazard refers to tangible dangers like fire or natural disasters, and moral hazard refers to situations where someone takes actions for financial gain that are immoral or unethical.