EXAM FX 5 ACTUAL TEST PAPER QUESTIONS CORRECT ANSWERS GRADED A PLUS
Question:
Warranty
Answer:
A material stipulation in the policy that if breached may void coverage.
Question:
Waiver
Answer:
The voluntary abandonment of a known or legal right or advantage.
Question:
Waiting Period
Answer:
Time between the beginning of a disability and the start of disability insurance benefits.
Question:
Vicarious Liability
Answer:
A type of liability in which one person is responsible for the acts of another. For example,
employers may be vicariously liable for the actions of their employees, and parents may be held
responsible for negligent acts of their children.
Question:
,Valued Policy
Answer:
A policy used when it is difficult to establish the actual cash value of insured property after a loss
occurs because of its rarity or uniqueness. A valued policy provides for payment of the full policy
amount in the event of a total loss without regard to actual value or depreciation.
Question:
Vacant
Answer:
A property that has no contents, furnishings, or occupants.
Question:
Upmost Good Faith
Answer:
The fair and equal bargaining by both parties in forming the contract, where the applicant must
make full disclosure of risk to the company, and the insurance company must be fair in underwriting
the risk.
Question:
Unoccupied
Answer:
A property that has contents or furnishings in it, but is not being used or lived in.
Question:
Unintentional Tort
Answer:
The result of acting without proper care, generally referred to as negligence.
,Question:
Uninsured Motorist Coverage
Answer:
Coverage that allows the named insured, resident relative(s) and passengers in a covered auto to
collect sums another driver would be legally liable to pay for bodily injury resulting from an auto
accident, providing the accident was caused by an uninsured motorist, a hit-and-run driver or a
driver whose insurance company is insolvent.
Question:
Underinsured Motorist Coverage
Answer:
Coverage in an automobile insurance policy under which the insurer will pay costs up to specified
limits for bodily injury, if the liable driver's policy limits are exhausted and he/she cannot pay the
full amount for which he or she is liable.
Question:
Unilateral Contract
Answer:
A contract that legally binds only one party to contractual obligations after the premium is paid.
Question:
Underwriting
Answer:
The process of reviewing, accepting or rejecting applications for insurance.
Question:
Underwriter
Answer:
, A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
Question:
Unauthorized Insurer
Answer:
An insurance company that has not applied, or has applied and been denied a Certificate of
Authority.
Question:
Umbrella Liability Coverage
Answer:
Coverage that provides extra protection against liability, and excess amount of insurance above the
primary policy.
Question:
Twisting
Answer:
A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or
switch policies, even when it's to the insured's disadvantage.
Question:
Transfer
Answer:
A basic principle of insurance under which the risk of financial loss is assigned to another party.
Question:
Tort
Question:
Warranty
Answer:
A material stipulation in the policy that if breached may void coverage.
Question:
Waiver
Answer:
The voluntary abandonment of a known or legal right or advantage.
Question:
Waiting Period
Answer:
Time between the beginning of a disability and the start of disability insurance benefits.
Question:
Vicarious Liability
Answer:
A type of liability in which one person is responsible for the acts of another. For example,
employers may be vicariously liable for the actions of their employees, and parents may be held
responsible for negligent acts of their children.
Question:
,Valued Policy
Answer:
A policy used when it is difficult to establish the actual cash value of insured property after a loss
occurs because of its rarity or uniqueness. A valued policy provides for payment of the full policy
amount in the event of a total loss without regard to actual value or depreciation.
Question:
Vacant
Answer:
A property that has no contents, furnishings, or occupants.
Question:
Upmost Good Faith
Answer:
The fair and equal bargaining by both parties in forming the contract, where the applicant must
make full disclosure of risk to the company, and the insurance company must be fair in underwriting
the risk.
Question:
Unoccupied
Answer:
A property that has contents or furnishings in it, but is not being used or lived in.
Question:
Unintentional Tort
Answer:
The result of acting without proper care, generally referred to as negligence.
,Question:
Uninsured Motorist Coverage
Answer:
Coverage that allows the named insured, resident relative(s) and passengers in a covered auto to
collect sums another driver would be legally liable to pay for bodily injury resulting from an auto
accident, providing the accident was caused by an uninsured motorist, a hit-and-run driver or a
driver whose insurance company is insolvent.
Question:
Underinsured Motorist Coverage
Answer:
Coverage in an automobile insurance policy under which the insurer will pay costs up to specified
limits for bodily injury, if the liable driver's policy limits are exhausted and he/she cannot pay the
full amount for which he or she is liable.
Question:
Unilateral Contract
Answer:
A contract that legally binds only one party to contractual obligations after the premium is paid.
Question:
Underwriting
Answer:
The process of reviewing, accepting or rejecting applications for insurance.
Question:
Underwriter
Answer:
, A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
Question:
Unauthorized Insurer
Answer:
An insurance company that has not applied, or has applied and been denied a Certificate of
Authority.
Question:
Umbrella Liability Coverage
Answer:
Coverage that provides extra protection against liability, and excess amount of insurance above the
primary policy.
Question:
Twisting
Answer:
A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or
switch policies, even when it's to the insured's disadvantage.
Question:
Transfer
Answer:
A basic principle of insurance under which the risk of financial loss is assigned to another party.
Question:
Tort
