FIN 138 2.2 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
A waiver of premium rider increases the benefits of a life insurance policy by providing for continued
coverage without continued payment of premiums after a specific age. - Answers False
This section of the insurance contract enumerates the duties of the parties to the contract and, in
some cases, defines the terms used. Identify this element of the insurance contract. - Answers
Conditions
Which of the following are damages assessed against defendants for gross negligence, supposedly for
the purpose of punishment and to deter others from acting in a similar fashion? - Answers Punitive
damages
Consequential losses are also known as: - Answers Indirect losses
Which of the following statements is true about open-perils policy and named-perils policy. - Answers
Open-perils policies cover many perils not covered by named-perils policies
The insuring agreement provides a general description of the circumstances under which the policy
becomes applicable. - Answers True
These are statements that identify the person(s) or organization(s) covered by the contract, give
information about the loss exposure, and proved the basis upon which the contract is issued and the
premium determined. This information may be obtained orally or in a written application. This section
also includes the period of coverage and limitations of liability. Identify this section in an insurance
contract. - Answers Declarations
Losses that are accidental make prediction difficult, cause coverage to be expensive, and represent
circumstances in which coverage would be contrary to public policy. - Answers False
Calculate the ACV of personal property destroyed by fire based on the following information:
Purchase price of the personal property: $10,000
Replacement value of the personal property: $12,000
Percentage of property depreciation: 25% - Answers $9,000
Someone who is asked to come on to the property to benefit the property owner, such as customers
at a store or garbage collector, is classified as a licensee. - Answers False
One tort reform proposal is capping noneconomic damages. Noneconomic damages include -
Answers payment for pain and suffering.
A legal wrong for which the law allows a remedy in the form of money damages is a tort. - Answers
True
Steve was involved in an auto accident. Both drivers were partially at fault for the accident. Steve's
actual damages were $50,000. He was judged to be 60 percent at fault. If Steve's state has a pure
comparative negligence law, how much will Steve collect? - Answers $20,000
Compensatory damages include - Answers general damages and special damages.
Under certain conditions, the wrongful acts of one person can be attributed to another person. This
practice is called - Answers imputed negligence
All of the following requirements must be met to satisfy the doctrine of res ipsa loquitur EXCEPT -
Answers The injured party must prove negligence on the part of the defendant.
Failure to exercise the degree of case required by law to protect others from harm is called - Answers
negligence
The plaintiff in a negligence suit is the party who allegedly injured the defendant. - Answers False
Concealment or fraud before, during, or after a loss generally allows an insurer to contest property
insurance contracts. - Answers True
Since the homeowners' insurance policy is written by the insurer, ambiguities are interpreted in favor
of the insured. - Answers True
A waiver of premium rider increases the benefits of a life insurance policy by providing for continued
coverage without continued payment of premiums after a specific age. - Answers False
This section of the insurance contract enumerates the duties of the parties to the contract and, in
some cases, defines the terms used. Identify this element of the insurance contract. - Answers
Conditions
Which of the following are damages assessed against defendants for gross negligence, supposedly for
the purpose of punishment and to deter others from acting in a similar fashion? - Answers Punitive
damages
Consequential losses are also known as: - Answers Indirect losses
Which of the following statements is true about open-perils policy and named-perils policy. - Answers
Open-perils policies cover many perils not covered by named-perils policies
The insuring agreement provides a general description of the circumstances under which the policy
becomes applicable. - Answers True
These are statements that identify the person(s) or organization(s) covered by the contract, give
information about the loss exposure, and proved the basis upon which the contract is issued and the
premium determined. This information may be obtained orally or in a written application. This section
also includes the period of coverage and limitations of liability. Identify this section in an insurance
contract. - Answers Declarations
Losses that are accidental make prediction difficult, cause coverage to be expensive, and represent
circumstances in which coverage would be contrary to public policy. - Answers False
Calculate the ACV of personal property destroyed by fire based on the following information:
Purchase price of the personal property: $10,000
Replacement value of the personal property: $12,000
Percentage of property depreciation: 25% - Answers $9,000
Someone who is asked to come on to the property to benefit the property owner, such as customers
at a store or garbage collector, is classified as a licensee. - Answers False
One tort reform proposal is capping noneconomic damages. Noneconomic damages include -
Answers payment for pain and suffering.
A legal wrong for which the law allows a remedy in the form of money damages is a tort. - Answers
True
Steve was involved in an auto accident. Both drivers were partially at fault for the accident. Steve's
actual damages were $50,000. He was judged to be 60 percent at fault. If Steve's state has a pure
comparative negligence law, how much will Steve collect? - Answers $20,000
Compensatory damages include - Answers general damages and special damages.
Under certain conditions, the wrongful acts of one person can be attributed to another person. This
practice is called - Answers imputed negligence
All of the following requirements must be met to satisfy the doctrine of res ipsa loquitur EXCEPT -
Answers The injured party must prove negligence on the part of the defendant.
Failure to exercise the degree of case required by law to protect others from harm is called - Answers
negligence
The plaintiff in a negligence suit is the party who allegedly injured the defendant. - Answers False
Concealment or fraud before, during, or after a loss generally allows an insurer to contest property
insurance contracts. - Answers True
Since the homeowners' insurance policy is written by the insurer, ambiguities are interpreted in favor
of the insured. - Answers True
