Fundamentals of Insurance - Practice
Exam Questions With Correct Answers
The major function of insurance is:
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a. To reduce the cost of the losses
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b. To share the losses of the few among the many
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c. The safeguard the interest of mortgages
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d. To serve as a basis of existing credit system - CORRECT ANSWER✔✔-
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b. To share the losses of the few among the many
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A peril if best defined as:
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a. The chance of a loss
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b. The occurrence of a loss
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c. The cause of a loss
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d. The result of a loss - CORRECT ANSWER✔✔-c. The cause of a loss
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Indemnify means: |
,a. Returning the premium of the insured
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b. Restoring the insured's to the same financial position as they were in
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immediately prior to the loss | | | |
c. Paying the insured's the face amount of the policy
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d. Restoring the insured's to the same financial position as they were -
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CORRECT ANSWER✔✔-b. Restoring the insured's to the same financial
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position as they were immediately prior to the loss
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Property insurance contracts are designed to pay for loss or damage
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arising out of the happening of a specific event. Only the following
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statement regarding the events insured by property insurance contract
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is correct:
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a. The event must be a future event and it must be accidental
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b. The event may happen with the co-operation of the insured
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c. The event may happen with the intent of the insured
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d. The event may occur accidentally or be caused deliberately by the
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insured - CORRECT ANSWER✔✔-a. The event must be must be a future
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event and it must be accidental
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The following is the most practical way in which to deal with risk:
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a. Avoidance of Risk
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,b. Retention of Risk
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c. Controlling of Risk
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d. Transfer of Risk - CORRECT ANSWER✔✔-d. Transfer of Risk
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In a contract of insurance, consideration means:
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a. The exchange of something of value parties
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b. The amount the insurance can collect in event of a claim
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c. The object of insurance
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d. The reviewing of the details of the risk to be insured by an
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underwriter - CORRECT ANSWER✔✔-a. The exchange of something of
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value between parties
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Which of the following would be correct legal name of the insured in a
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contact of insurance: | |
a. The corner store
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b. John's Corner Store
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c. J.D.'s Corner Store
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d. The Corner Store Ltd - CORRECT ANSWER✔✔-d. The Corner Store Ltd
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, All contracts require that five elements be present if the contract is to
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be enforceable by law. An insurance contract is enforceable only if it
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contains the following three additional interest:
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a. Insurable Interest, Utmost Good Faith
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b. Insurable Interest, Consideration, Indemnity
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c. Insurable Interest, Indemnity, Utmost Good Faith
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d. Insurable Interest, Indemnity, Genuine Intention - CORRECT
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ANSWER✔✔-c. Insurable Interest, Indemnity, Utmost Good Faith | | | | | |
If your clients do not advise the insurer of previous losses when
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required to do so, they have violated an essential principle of insurance
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contracts. This principle is: | | |
a. Legality of Object
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b. Utmost good faith
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c. Insurable Interest
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d. Indemnity - CORRECT ANSWER✔✔-b. Utmost good faith
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To bind a risk means:
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a. That the broker has committed an insurer to provide a contract of
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insurance on the subject matter under discussion
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Exam Questions With Correct Answers
The major function of insurance is:
| | | | |
a. To reduce the cost of the losses
| | | | | | |
b. To share the losses of the few among the many
| | | | | | | | | |
c. The safeguard the interest of mortgages
| | | | | |
d. To serve as a basis of existing credit system - CORRECT ANSWER✔✔-
| | | | | | | | | | | |
b. To share the losses of the few among the many
| | | | | | | | | |
A peril if 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 - CORRECT ANSWER✔✔-c. The cause of a loss
| | | | | | | | | | | | |
Indemnify means: |
,a. Returning the premium of the insured
| | | | | |
b. Restoring the insured's to the same financial position as they were in
| | | | | | | | | | | | |
immediately prior to the loss | | | |
c. Paying the insured's the face amount of the policy
| | | | | | | | |
d. Restoring the insured's to the same financial position as they were -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-b. Restoring the insured's to the same financial
| | | | | | | | |
position as they were immediately prior to the loss
| | | | | | | |
Property insurance contracts are designed to pay for loss or damage
| | | | | | | | | | |
arising out of the happening of a specific event. Only the following
| | | | | | | | | | | |
statement regarding the events insured by property insurance contract
| | | | | | | | |
is correct:
|
a. The event must be a future event and it must be accidental
| | | | | | | | | | | |
b. The event may happen with the co-operation of the insured
| | | | | | | | | |
c. The event may happen with the intent of the insured
| | | | | | | | | |
d. The event may occur accidentally or be caused deliberately by the
| | | | | | | | | | | |
insured - CORRECT ANSWER✔✔-a. The event must be must be a future
| | | | | | | | | | | |
event and it must be accidental
| | | | |
The following is the most practical way in which to deal with risk:
| | | | | | | | | | | |
a. Avoidance of Risk
| | |
,b. Retention of Risk
| | |
c. Controlling of Risk
| | |
d. Transfer of Risk - CORRECT ANSWER✔✔-d. Transfer of Risk
| | | | | | | | |
In a contract of insurance, consideration means:
| | | | | |
a. The exchange of something of value parties
| | | | | | |
b. The amount the insurance can collect in event of a claim
| | | | | | | | | | |
c. The object of insurance
| | | | |
d. The reviewing of the details of the risk to be insured by an
| | | | | | | | | | | | | |
underwriter - CORRECT ANSWER✔✔-a. The exchange of something of
| | | | | | | | |
value between parties
| |
Which of the following would be correct legal name of the insured in a
| | | | | | | | | | | | | |
contact of insurance: | |
a. The corner store
| | |
b. John's Corner Store
| | |
c. J.D.'s Corner Store
| | |
d. The Corner Store Ltd - CORRECT ANSWER✔✔-d. The Corner Store Ltd
| | | | | | | | | | |
, All contracts require that five elements be present if the contract is to
| | | | | | | | | | | | |
be enforceable by law. An insurance contract is enforceable only if it
| | | | | | | | | | | |
contains the following three additional interest:
| | | | |
a. Insurable Interest, Utmost Good Faith
| | | | |
b. Insurable Interest, Consideration, Indemnity
| | | |
c. Insurable Interest, Indemnity, Utmost Good Faith
| | | | | |
d. Insurable Interest, Indemnity, Genuine Intention - CORRECT
| | | | | | | |
ANSWER✔✔-c. Insurable Interest, Indemnity, Utmost Good Faith | | | | | |
If your clients do not advise the insurer of previous losses when
| | | | | | | | | | | |
required to do so, they have violated an essential principle of insurance
| | | | | | | | | | | |
contracts. This principle is: | | |
a. Legality of Object
| | |
b. Utmost good faith
| | |
c. Insurable Interest
| |
d. Indemnity - CORRECT ANSWER✔✔-b. Utmost good faith
| | | | | | |
To bind a risk means:
| | | |
a. That the broker has committed an insurer to provide a contract of
| | | | | | | | | | | | |
insurance on the subject matter under discussion
| | | | | |
