Level 1 Fundamentals of Insurance
Practice Exam Questions With Correct
Answers
Your client has made application for "appraisal". The intent of the
| | | | | | | | | | |
appraisal process is to settle the dispute between your client and the
| | | | | | | | | | | |
insurer regarding the:
| |
a. Amount of the settlement being offered
| | | | | |
b. Denial of insurance coverage under the policy
| | | | | | |
c. Right of the insured to purchase the salvage after an insured loss
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d. Premium charged to coverages being provided by the insurer -
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CORRECT ANSWER✔✔-a |
An indifferent attitude towards losses because of the presence of
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insurance indicates the presence of: | | | |
a. Gross negligence
| |
b. Physical hazard
| |
c. A material change
| | |
d. Moral hazard - CORRECT ANSWER✔✔-d
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Insurable interest means the: | | |
,a. Interest gained on money in a bank
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b. Interest payable on a loan
| | | | |
c. Personal interest people have in something they expect to inherit
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d. Financial interest a person has in something of value - CORRECT
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ANSWER✔✔-d
Every policy of "fire" insurance:
| | | |
a. Usually covers fire, smoke, and specified types of explosions
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b. Is required by law to cover fire, windstorm, and lightning
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c. Covers, fire, explosion, and windstorm
| | | | |
d. Is required by law to cover at least fire, lightning, and specified types
| | | | | | | | | | | | | |
of explosions - CORRECT ANSWER✔✔-d
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Your client's insurance policy was cancelled for non-payment of
| | | | | | | | |
premium. 6 days after the notice of termination was mailed, your client
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had a loss.
| |
a. The loss would not be covered because no premiums had been paid
| | | | | | | | | | | |
b. The mailing of the notice automatically cancels the policy after 5 days
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c. The loss is covered because 15 days' notice must be given by
| | | | | | | | | | | | |
registered mail |
d. The loss would be covered but only in proportion to the time the
| | | | | | | | | | | | | |
policy was in effect. - CORRECT ANSWER✔✔-c
| | | | | |
,Under a policy of "fire" insurance, the insurer must make payment for a
| | | | | | | | | | | | |
loss within:
|
a. 75 days after completion of the proof of loss.
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b. 90 days after completion of the proof of loss.
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c. 60 days after the completion of the proof of loss unless the contract
| | | | | | | | | | | | | |
provides for a shorter period. | | | |
d. One year from the date the loss occurred. - CORRECT ANSWER✔✔-c
| | | | | | | | | | |
Every property insurance policy describes the method used to pay
| | | | | | | | | |
claims. Normally the insurer will pay the lesser of three amounts in the
| | | | | | | | | | | | |
event of a claim. One factor which does not enter into this calculations
| | | | | | | | | | | | |
is the:
|
a. Actual cash value of the property.
| | | | | |
b. Original cost of the property.
| | | | |
c. Insured's interest in the property.
| | | | |
d. Policy limit. - CORRECT ANSWER✔✔-b
| | | | |
Your client recently had a burglary. In the documents filed with the
| | | | | | | | | | | |
insurance company, she made a claim for a $1,200 television set she
| | | | | | | | | | | |
never had. This is a:| | | |
a. Breach of warranty
| | |
b. Fraud
|
c. Misrepresentation
|
, d. Material change - CORRECT ANSWER✔✔-b
| | | | |
It can be said that the concept of insurance is based on sharing, which is
| | | | | | | | | | | | | |
|the fundamental principle of a functioning society. Insurance is an
| | | | | | | | | |
undertaking that: |
a. Spreads the risk of loss among many people
| | | | | | | |
b. Obtains financing for a risky capital venture
| | | | | | |
c. Protects oneself against loss due to bankruptcy
| | | | | | |
d. Prevents the happening of certain types of losses - CORRECT
| | | | | | | | | | |
ANSWER✔✔-a
When the insurer terminates an insurance policy, all of the following
| | | | | | | | | | |
conditions apply, except one. Pick the Exception:
| | | | | |
a. The insured is entitled to 15 days' written notice of termination sent
| | | | | | | | | | | | |
by registered mail of five days' written notice personally delivered.
| | | | | | | | |
b. The refund due the insured shall be calculated on a short rate basis
| | | | | | | | | | | | |
c. Unless otherwise stated, the refund shall accompany the notice of
| | | | | | | | | | |
termination.
d. The refund shall be in the form of money, postal or express company
| | | | | | | | | | | | | |
money order or cheque payable at par. - CORRECT ANSWER✔✔-b
| | | | | | | | |
The major function of insurance is to:
| | | | | |
a. Reduce the cost of losses.
| | | | |
Practice Exam Questions With Correct
Answers
Your client has made application for "appraisal". The intent of the
| | | | | | | | | | |
appraisal process is to settle the dispute between your client and the
| | | | | | | | | | | |
insurer regarding the:
| |
a. Amount of the settlement being offered
| | | | | |
b. Denial of insurance coverage under the policy
| | | | | | |
c. Right of the insured to purchase the salvage after an insured loss
| | | | | | | | | | | |
d. Premium charged to coverages being provided by the insurer -
| | | | | | | | | | |
CORRECT ANSWER✔✔-a |
An indifferent attitude towards losses because of the presence of
| | | | | | | | | |
insurance indicates the presence of: | | | |
a. Gross negligence
| |
b. Physical hazard
| |
c. A material change
| | |
d. Moral hazard - CORRECT ANSWER✔✔-d
| | | | |
Insurable interest means the: | | |
,a. Interest gained on money in a bank
| | | | | | |
b. Interest payable on a loan
| | | | |
c. Personal interest people have in something they expect to inherit
| | | | | | | | | |
d. Financial interest a person has in something of value - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-d
Every policy of "fire" insurance:
| | | |
a. Usually covers fire, smoke, and specified types of explosions
| | | | | | | | |
b. Is required by law to cover fire, windstorm, and lightning
| | | | | | | | | |
c. Covers, fire, explosion, and windstorm
| | | | |
d. Is required by law to cover at least fire, lightning, and specified types
| | | | | | | | | | | | | |
of explosions - CORRECT ANSWER✔✔-d
| | | |
Your client's insurance policy was cancelled for non-payment of
| | | | | | | | |
premium. 6 days after the notice of termination was mailed, your client
| | | | | | | | | | | |
had a loss.
| |
a. The loss would not be covered because no premiums had been paid
| | | | | | | | | | | |
b. The mailing of the notice automatically cancels the policy after 5 days
| | | | | | | | | | | |
c. The loss is covered because 15 days' notice must be given by
| | | | | | | | | | | | |
registered mail |
d. The loss would be covered but only in proportion to the time the
| | | | | | | | | | | | | |
policy was in effect. - CORRECT ANSWER✔✔-c
| | | | | |
,Under a policy of "fire" insurance, the insurer must make payment for a
| | | | | | | | | | | | |
loss within:
|
a. 75 days after completion of the proof of loss.
| | | | | | | | |
b. 90 days after completion of the proof of loss.
| | | | | | | | |
c. 60 days after the completion of the proof of loss unless the contract
| | | | | | | | | | | | | |
provides for a shorter period. | | | |
d. One year from the date the loss occurred. - CORRECT ANSWER✔✔-c
| | | | | | | | | | |
Every property insurance policy describes the method used to pay
| | | | | | | | | |
claims. Normally the insurer will pay the lesser of three amounts in the
| | | | | | | | | | | | |
event of a claim. One factor which does not enter into this calculations
| | | | | | | | | | | | |
is the:
|
a. Actual cash value of the property.
| | | | | |
b. Original cost of the property.
| | | | |
c. Insured's interest in the property.
| | | | |
d. Policy limit. - CORRECT ANSWER✔✔-b
| | | | |
Your client recently had a burglary. In the documents filed with the
| | | | | | | | | | | |
insurance company, she made a claim for a $1,200 television set she
| | | | | | | | | | | |
never had. This is a:| | | |
a. Breach of warranty
| | |
b. Fraud
|
c. Misrepresentation
|
, d. Material change - CORRECT ANSWER✔✔-b
| | | | |
It can be said that the concept of insurance is based on sharing, which is
| | | | | | | | | | | | | |
|the fundamental principle of a functioning society. Insurance is an
| | | | | | | | | |
undertaking that: |
a. Spreads the risk of loss among many people
| | | | | | | |
b. Obtains financing for a risky capital venture
| | | | | | |
c. Protects oneself against loss due to bankruptcy
| | | | | | |
d. Prevents the happening of certain types of losses - CORRECT
| | | | | | | | | | |
ANSWER✔✔-a
When the insurer terminates an insurance policy, all of the following
| | | | | | | | | | |
conditions apply, except one. Pick the Exception:
| | | | | |
a. The insured is entitled to 15 days' written notice of termination sent
| | | | | | | | | | | | |
by registered mail of five days' written notice personally delivered.
| | | | | | | | |
b. The refund due the insured shall be calculated on a short rate basis
| | | | | | | | | | | | |
c. Unless otherwise stated, the refund shall accompany the notice of
| | | | | | | | | | |
termination.
d. The refund shall be in the form of money, postal or express company
| | | | | | | | | | | | | |
money order or cheque payable at par. - CORRECT ANSWER✔✔-b
| | | | | | | | |
The major function of insurance is to:
| | | | | |
a. Reduce the cost of losses.
| | | | |
