EXAM FX 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.
