Property and Casualty Insurance Practice Exam

Which insurance type is typically not available from private insurers and often requires government provision?

1. Monoline Insurance

2. Multiline Insurance

3. Residual Market Insurance

4. Health Insurance

The correct answer is: Residual Market Insurance

Residual market insurance is a type of coverage that is often not available from private insurers due to the high risk associated with the insured party. It is designed to provide insurance to individuals or businesses that are unable to secure coverage through the standard insurance market because of their risk profile. This can include high-risk drivers, properties in disaster-prone areas, or businesses that do not meet the underwriting criteria of traditional insurers. As a result, these individuals and businesses may turn to government-sponsored programs or pools that ensure they can obtain necessary coverage, hence requiring government provision. Monoline insurance refers to policies that cover a single type of risk, while multiline insurance encompasses multiple types of coverage offered in a single policy, both of which are typically provided by private insurers. Health insurance, though sometimes influenced by government programs, is widely available through private insurers as well.