Fundamentals of Insurance Exam
Questions With Correct Answers
The coverage limits on Homeowners Insurance Policies are determined
| | | | | | | | |
after calculating the Replacement Cost of the dwelling building. Once
| | | | | | | | | |
this value is determined, the rest of the coverage limits are calculated.
| | | | | | | | | | | |
Which of the following coverage limits is correct?
| | | | | | |
a) Personal Property- 100% of Coverage A
| | | | | |
b) Detached Private Structures - 10% of Coverage A
| | | | | | | |
c) Additional Living Expenses- - 10% of Coverage A
| | | | | | | |
d) Dwelling- 100% of Personal Property Coverage - CORRECT
| | | | | | | | |
ANSWER✔✔-The answer is B | | |
Insurance has been around for a long time and can be traced back
| | | | | | | | | | | | |
hundreds of years. The birth of Fire insurance can be traced back to:
| | | | | | | | | | | |
A) London, England in June 1660
| | | | |
B) London, England in September 1666
| | | | |
C) London, England in June 1666
| | | | |
D) London, England in September 1888 - CORRECT ANSWER✔✔-The
| | | | | | | | |
answer is B | | |
London, England in September 1666
| | | |
,Which of the following is NOT one of the 5 "Functions of Insurance"?
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A) Spread of Risk
| | | |
B) Employment
| |
C) Loss Prevention and Loss Reduction
| | | | |
D) Loss Control and Loss Transfer - CORRECT ANSWER✔✔-The answer is
| | | | | | | | | |
D
|
Loss Control and Loss Transfer
| | | |
Insurance is based on the "Principle of Indemnity". Which of the
| | | | | | | | | | |
following definitions best describes this principle?
| | | | |
a) Ensures that people receive the actual amount of their loss, no more
| | | | | | | | | | | | |
no less |
b) Ensures that the limits of insurance are always reinstated after a loss
| | | | | | | | | | | |
c) Ensures that people will receive a cash settlement for all insured
| | | | | | | | | | | |
losses
d) Ensures that people will be provided with a place to stay when their
| | | | | | | | | | | | | |
dwelling is deemed unfit for occupancy after a loss - CORRECT
| | | | | | | | | | |
ANSWER✔✔-The answer is A | | |
Ensures that people receive the actual amount of their loss, no more no
| | | | | | | | | | | | |
less
,The 2 different types of Private Insurers are Stock Companies and
| | | | | | | | | | |
Mutual Companies. These 2 types of companies have many similarities
| | | | | | | | | |
and some differences. One main difference is the ownership. Who are
| | | | | | | | | | |
mutual Companies owned by?
| | |
a) Stockholders
|
b) Policyholders
| |
c) Employees
|
d) The Federal Government - CORRECT ANSWER✔✔-The answer is B
| | | | | | | | |
Policyholders
There are several different types of Government Insurance plans in
| | | | | | | | | |
Canada. Which of the following is NOT considered one of these plans?
| | | | | | | | | | |
a) Compulsory Government Automobile Insurance
| | | | |
b) Provincial Medical Plans
| | | |
c) The Facility Association in Automobile Insurance (available in Private
| | | | | | | | | |
Insurance provinces) | |
d) Workers Compensation plans - CORRECT ANSWER✔✔-The answer is
| | | | | | | | |
C
The Facility Association in Automobile Insurance (available in Private
| | | | | | | | |
Insurance provinces) |
Lloyds of London has proven to be a valuable option for clients and their
| | | | | | | | | | | | |
specific risks. Which of the following statements about "Lloyds of
| | | | | | | | | | |
London" is true? | |
, a) Provides Habitational Insurance for New Homes
| | | | | | |
b) Is an Insurance Company specifically for complex risks
| | | | | | | |
c) Operates as an insurance market
| | | | | |
d) Is not available in Canada as it is based in London, England, and is not
| | | | | | | | | | | | | | | |
licensed in North America - CORRECT ANSWER✔✔-The answer is C)
| | | | | | | | | |
Operates as an insurance market | | | |
Insureds may choose from a number of different ways to deal with the
| | | | | | | | | | | | |
chance of financial loss associated with their property. One of these
| | | | | | | | | | |
ways is "Controlling of Risk", which of the following would be a way for
| | | | | | | | | | | | | |
an insured to control their risk?
| | | | |
a) Elect to stay home as it is safer than the outside world
| | | | | | | | | | | |
b) Install an immobilizer in their vehicle
| | | | | | |
c) Purchase Insurance
| | |
d) Decide to not claim damage to a window in their dwelling as their
| | | | | | | | | | | | | |
deductible is substantially high than the cost to replace the window -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-The answer is B | | | |
Install an immobilizer in their vehicle
| | | | |
When it comes to Contracts, there are 5 elements that must be present
| | | | | | | | | | | | |
for the contract to be enforceable by law. Which of the following best
| | | | | | | | | | | | |
describes "Consideration"? |
a) When all parties are considered to be legally capable to enter the
| | | | | | | | | | | | |
contract |
Questions With Correct Answers
The coverage limits on Homeowners Insurance Policies are determined
| | | | | | | | |
after calculating the Replacement Cost of the dwelling building. Once
| | | | | | | | | |
this value is determined, the rest of the coverage limits are calculated.
| | | | | | | | | | | |
Which of the following coverage limits is correct?
| | | | | | |
a) Personal Property- 100% of Coverage A
| | | | | |
b) Detached Private Structures - 10% of Coverage A
| | | | | | | |
c) Additional Living Expenses- - 10% of Coverage A
| | | | | | | |
d) Dwelling- 100% of Personal Property Coverage - CORRECT
| | | | | | | | |
ANSWER✔✔-The answer is B | | |
Insurance has been around for a long time and can be traced back
| | | | | | | | | | | | |
hundreds of years. The birth of Fire insurance can be traced back to:
| | | | | | | | | | | |
A) London, England in June 1660
| | | | |
B) London, England in September 1666
| | | | |
C) London, England in June 1666
| | | | |
D) London, England in September 1888 - CORRECT ANSWER✔✔-The
| | | | | | | | |
answer is B | | |
London, England in September 1666
| | | |
,Which of the following is NOT one of the 5 "Functions of Insurance"?
| | | | | | | | | | | |
A) Spread of Risk
| | | |
B) Employment
| |
C) Loss Prevention and Loss Reduction
| | | | |
D) Loss Control and Loss Transfer - CORRECT ANSWER✔✔-The answer is
| | | | | | | | | |
D
|
Loss Control and Loss Transfer
| | | |
Insurance is based on the "Principle of Indemnity". Which of the
| | | | | | | | | | |
following definitions best describes this principle?
| | | | |
a) Ensures that people receive the actual amount of their loss, no more
| | | | | | | | | | | | |
no less |
b) Ensures that the limits of insurance are always reinstated after a loss
| | | | | | | | | | | |
c) Ensures that people will receive a cash settlement for all insured
| | | | | | | | | | | |
losses
d) Ensures that people will be provided with a place to stay when their
| | | | | | | | | | | | | |
dwelling is deemed unfit for occupancy after a loss - CORRECT
| | | | | | | | | | |
ANSWER✔✔-The answer is A | | |
Ensures that people receive the actual amount of their loss, no more no
| | | | | | | | | | | | |
less
,The 2 different types of Private Insurers are Stock Companies and
| | | | | | | | | | |
Mutual Companies. These 2 types of companies have many similarities
| | | | | | | | | |
and some differences. One main difference is the ownership. Who are
| | | | | | | | | | |
mutual Companies owned by?
| | |
a) Stockholders
|
b) Policyholders
| |
c) Employees
|
d) The Federal Government - CORRECT ANSWER✔✔-The answer is B
| | | | | | | | |
Policyholders
There are several different types of Government Insurance plans in
| | | | | | | | | |
Canada. Which of the following is NOT considered one of these plans?
| | | | | | | | | | |
a) Compulsory Government Automobile Insurance
| | | | |
b) Provincial Medical Plans
| | | |
c) The Facility Association in Automobile Insurance (available in Private
| | | | | | | | | |
Insurance provinces) | |
d) Workers Compensation plans - CORRECT ANSWER✔✔-The answer is
| | | | | | | | |
C
The Facility Association in Automobile Insurance (available in Private
| | | | | | | | |
Insurance provinces) |
Lloyds of London has proven to be a valuable option for clients and their
| | | | | | | | | | | | |
specific risks. Which of the following statements about "Lloyds of
| | | | | | | | | | |
London" is true? | |
, a) Provides Habitational Insurance for New Homes
| | | | | | |
b) Is an Insurance Company specifically for complex risks
| | | | | | | |
c) Operates as an insurance market
| | | | | |
d) Is not available in Canada as it is based in London, England, and is not
| | | | | | | | | | | | | | | |
licensed in North America - CORRECT ANSWER✔✔-The answer is C)
| | | | | | | | | |
Operates as an insurance market | | | |
Insureds may choose from a number of different ways to deal with the
| | | | | | | | | | | | |
chance of financial loss associated with their property. One of these
| | | | | | | | | | |
ways is "Controlling of Risk", which of the following would be a way for
| | | | | | | | | | | | | |
an insured to control their risk?
| | | | |
a) Elect to stay home as it is safer than the outside world
| | | | | | | | | | | |
b) Install an immobilizer in their vehicle
| | | | | | |
c) Purchase Insurance
| | |
d) Decide to not claim damage to a window in their dwelling as their
| | | | | | | | | | | | | |
deductible is substantially high than the cost to replace the window -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-The answer is B | | | |
Install an immobilizer in their vehicle
| | | | |
When it comes to Contracts, there are 5 elements that must be present
| | | | | | | | | | | | |
for the contract to be enforceable by law. Which of the following best
| | | | | | | | | | | | |
describes "Consideration"? |
a) When all parties are considered to be legally capable to enter the
| | | | | | | | | | | | |
contract |
