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Fundamentals of Insurance - Licensing Practice Exam 2 Questions and
Answers with Solutions UPDATED!!!
"Indemnify" means:
a. Returning the premium of the Insured
b. Restoring the Insured to the same financial position as he
was in immediately prior to the loss
c. Paying the Insured the face amount of the policy
d. Restoring the insured to the same financial position as he
was in at the inception date of the policy - ANSWER b. Restoring
the Insured to the same financial position as he was in
immediately prior to the loss
"Negligence" is:
a. Failing to do what a reasonable person would do in a given
situation
b. Acting prudently, having regard to the circumstances
c. willfully disobeying the law
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d. aiding and abetting another person to commit a felony -
ANSWER a. Failing to do what a reasonable person would do in
a given situation
"Subrogation"d means:
a. The right of the insurance company to recover payments
made under the policy from another person who is legally
responsible for the loss
b. The amount of the insurance company receives from a
person who is legally responsible for a loss
c. That the insurance company takes over the salvage after it
has paid the claim in full
d. That the Insured has the option of receiving payment for the
loss from either the insurer or the person responsible -
ANSWER a. The right of the insurance company to recover
payments made under the policy from another person who is
legally responsible for the loss
1. To "Bind a Risk" means:
a. Having authority from the Insurer to put insurance in force
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b. Finding a company willing to give a quote on a risk
c. Getting underwriting information from a client
d. Automatically renewing an existing policy - ANSWER a.
Having authority from the Insurer to put insurance in force
A "peril" is best defined as:
a. The chance of a loss
b. The occurrence of a loss
c. The cause of a loss
d. The result of a loss - ANSWER c. The cause of a loss
A building worth $200,000 is insured for $125,000 and the
policy contain an 80% co-insurance clause. A fire causes the
total building to be destroyed. The insured will recover:
a. $97,662.50
b. $78,125.00
c. $100,000.00
d. $125,000.00 - ANSWER d. $125,000.00
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A building worth $360,000 is insured for $90,000 and the policy
contains an 80% co-insurance clause. A fire caused $72,000
damage. The insured will cover:
a. $22,500
b. $72,000
c. $90,000
d. $57,600 - ANSWER a. $22,500
a comprehensive personal liability police protects against claims
for the bodily injury and property damage arising out of:
a. personal acts of insured, carelessness of insured's children
and ownership of certain typed of boats and motorized vehicles
b. personal acts of the insured ownership of certain boats and
ownership of automobiles
c. personal acts of the insured, carelessness of insured's and
default in payment of debts
d. personal acts of the insured, poor up-keep of insured's
dwelling and ice on the steps of the insured's business premises
Fundamentals of Insurance - Licensing Practice Exam 2 Questions and
Answers with Solutions UPDATED!!!
"Indemnify" means:
a. Returning the premium of the Insured
b. Restoring the Insured to the same financial position as he
was in immediately prior to the loss
c. Paying the Insured the face amount of the policy
d. Restoring the insured to the same financial position as he
was in at the inception date of the policy - ANSWER b. Restoring
the Insured to the same financial position as he was in
immediately prior to the loss
"Negligence" is:
a. Failing to do what a reasonable person would do in a given
situation
b. Acting prudently, having regard to the circumstances
c. willfully disobeying the law
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d. aiding and abetting another person to commit a felony -
ANSWER a. Failing to do what a reasonable person would do in
a given situation
"Subrogation"d means:
a. The right of the insurance company to recover payments
made under the policy from another person who is legally
responsible for the loss
b. The amount of the insurance company receives from a
person who is legally responsible for a loss
c. That the insurance company takes over the salvage after it
has paid the claim in full
d. That the Insured has the option of receiving payment for the
loss from either the insurer or the person responsible -
ANSWER a. The right of the insurance company to recover
payments made under the policy from another person who is
legally responsible for the loss
1. To "Bind a Risk" means:
a. Having authority from the Insurer to put insurance in force
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b. Finding a company willing to give a quote on a risk
c. Getting underwriting information from a client
d. Automatically renewing an existing policy - ANSWER a.
Having authority from the Insurer to put insurance in force
A "peril" is best defined as:
a. The chance of a loss
b. The occurrence of a loss
c. The cause of a loss
d. The result of a loss - ANSWER c. The cause of a loss
A building worth $200,000 is insured for $125,000 and the
policy contain an 80% co-insurance clause. A fire causes the
total building to be destroyed. The insured will recover:
a. $97,662.50
b. $78,125.00
c. $100,000.00
d. $125,000.00 - ANSWER d. $125,000.00
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A building worth $360,000 is insured for $90,000 and the policy
contains an 80% co-insurance clause. A fire caused $72,000
damage. The insured will cover:
a. $22,500
b. $72,000
c. $90,000
d. $57,600 - ANSWER a. $22,500
a comprehensive personal liability police protects against claims
for the bodily injury and property damage arising out of:
a. personal acts of insured, carelessness of insured's children
and ownership of certain typed of boats and motorized vehicles
b. personal acts of the insured ownership of certain boats and
ownership of automobiles
c. personal acts of the insured, carelessness of insured's and
default in payment of debts
d. personal acts of the insured, poor up-keep of insured's
dwelling and ice on the steps of the insured's business premises
