Fundamentals Of Insurance Level 1 Practice
Exam Questions And 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
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
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
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
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.
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.
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.
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
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
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.
Exam Questions And 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
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
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
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
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.
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.
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.
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
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
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.
