Fundamentals to Insurance exam questions and 100% correct answers
Chapter 1 - Intro - correct answer List the 5 functions of insurance: - correct answer 1) Spread of risk 2) Basis of credit system 3) Eliminate worry and develop entrepreneurship 4) Loss reduction and prevention (road safety, alarms, etc.) 5) Employment opportunity Definition of insurance (3 parts) - correct answer 1) insurance provides a means of shifting ones financial responsibility from a loss to another party ii) payment will be made only in the event of the happening of a certain risk or peril iii) the amount of the payment is restricted to the amount required to indemnify the insured 5 points of insurance - correct answer 1) Shift financial responsibility for a loss 2) payment made only in the event of a loss 3) Payment restricted to amount to indemnify (no more, no less) 4) Cover loss to which object of insurance may be exposed (accidental and future) 5) Indemnify in form of money or other thing of value (rebuild/repair) 3 types of property and casualty insurance - correct answer Auto, property (home and business), and liability (injury or damage to a third party) What are the 2 major types of insurers and provide an example for each - correct answer Private (stock profit or mutual policy holder), or government (ICBC, employment insurance)
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