6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
Fundamentals to Insurance COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS (DETAILED
& ELABORATED) ACTUAL EXAM 2025 TEST 100%
SOLVED 2025!!
Save
Terms in this set (404)
Chapter 1 - Intro
1) Spread of risk
2) Basis of credit system
List the 5 functions of 3) Eliminate worry and develop entrepreneurship
insurance: 4) Loss reduction and prevention (road safety, alarms,
etc.)
5) Employment opportunity
1) insurance provides a means of shifting ones
financial responsibility from a loss to another party
Definition of insurance (3 ii) payment will be made only in the event of the
parts) happening of a certain risk or peril
iii) the amount of the payment is restricted to the
amount required to indemnify the insured
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,6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
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)
5 points of insurance
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 Auto, property (home and business), and liability
casualty insurance (injury or damage to a third party)
What are the 2 major Private (stock profit or mutual policy holder), or
types of insurers and government (ICBC, employment insurance)
provide an example for
each
Stock - main purpose is to derive a profit, ownerships
in the hand of the company's shareholder. Money to
What is the difference
operate comes from private funds and public sales of
between mutual
stock
companies and stock
Mutual - main purpose is to provide insurance at the
companies?
lowest cost possible, corporation owned by policy
holders, money made goes to policyholders
What is known as the Spread of the losses of the few among the many
major function of
insurance?
Where is the definition of The Insurance Act
insurance usually found
Define peril Cause of loss
Chance of loss to which the object of insurance is
Define risk
exposed
At what point in time is Moments before the loss
indemnity calculated?
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,6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
What two factors Future and accidental
regarding losses must be
present for them to be
insured?
Who retains the option to Insurer
repair or replace
damaged property rather
than pay cash
settlements?
Main purpose of stock Profit maximization
companies?
Identify the two main Direct writers (work for one insurance company) and
distribution methods used independent brokers (work for multiple insurance
by insurers for their companies - can offer multiple options for insurance,
products not limited)
Major function of Share losses of the few among the many
insurance is to:
Does insurance allow Yes, replacement or repair
payment to be in another
form than money?
Chapter 2 - Insurance
Contracts
1) Rider (adding additional coverage)
2) Floater (provides coverage for items not on the
insured premise)
There are 4 ways changes
3) Endorsement (acknowledges changes in the actual
can be made to a policy.
contract)
What are the 4 ways?
4) Separate policy (additional coverage, but no
change in the original contract - new policy
altogether)
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, 6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
1) Avoidance (don't buy the car in the first place)
2) Controlling (car alarms)
4 ways to deal with risk 3) Retention (increase in deductible or putting money
aside)
4) Transfer (buying insurance)
3 categories of risk Personal (health, anything directly affecting you),
insurance property (house, care), and liability (3rd party)
An agreement between two or more parties,
Define contract
enforceable at law
What are the 2 kinds of Pure risk (no chance for profit gain, insurable), and
risk? Which one is not speculative (chance for profit or loss, for example
insurable? gambling or starting a new business, not insurable)
Identify four options Avoidance, risk control, retention, transfer
people have when dealing
with risk
What type of risk control Loss prevention
reduces loss frequency?
Which method of dealing Insurance
with losses and risk is most
practical?
What type of risk is Pure risk
insurable?
Agreement (offer and unconditional acceptance),
consideration (exchange of something of value),
Identify 5 elements that
legality of object (not illegal), legal capacity of the
must be present in all
parties (not children, not mentally incompetent),
contracts
genuine intention (no inducement, needs to be
intended)
What is consideration? Exchange of something of value
Insurable interest (insured person derives a financial
3 unique elements of
or other kind of benefit), indemnity (no more no less),
insurance contracts
utmost good faith (honest, trust each other)
https://quizlet.com/1050404590/fundamentals-to-insurance-comprehensive-questions-and-verified-answers-detailed-elaborated-actual-exam-2025-te… 4/54
Fundamentals to Insurance COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS (DETAILED
& ELABORATED) ACTUAL EXAM 2025 TEST 100%
SOLVED 2025!!
Save
Terms in this set (404)
Chapter 1 - Intro
1) Spread of risk
2) Basis of credit system
List the 5 functions of 3) Eliminate worry and develop entrepreneurship
insurance: 4) Loss reduction and prevention (road safety, alarms,
etc.)
5) Employment opportunity
1) insurance provides a means of shifting ones
financial responsibility from a loss to another party
Definition of insurance (3 ii) payment will be made only in the event of the
parts) happening of a certain risk or peril
iii) the amount of the payment is restricted to the
amount required to indemnify the insured
https://quizlet.com/1050404590/fundamentals-to-insurance-comprehensive-questions-and-verified-answers-detailed-elaborated-actual-exam-2025-te… 1/54
,6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
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)
5 points of insurance
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 Auto, property (home and business), and liability
casualty insurance (injury or damage to a third party)
What are the 2 major Private (stock profit or mutual policy holder), or
types of insurers and government (ICBC, employment insurance)
provide an example for
each
Stock - main purpose is to derive a profit, ownerships
in the hand of the company's shareholder. Money to
What is the difference
operate comes from private funds and public sales of
between mutual
stock
companies and stock
Mutual - main purpose is to provide insurance at the
companies?
lowest cost possible, corporation owned by policy
holders, money made goes to policyholders
What is known as the Spread of the losses of the few among the many
major function of
insurance?
Where is the definition of The Insurance Act
insurance usually found
Define peril Cause of loss
Chance of loss to which the object of insurance is
Define risk
exposed
At what point in time is Moments before the loss
indemnity calculated?
https://quizlet.com/1050404590/fundamentals-to-insurance-comprehensive-questions-and-verified-answers-detailed-elaborated-actual-exam-2025-te… 2/54
,6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
What two factors Future and accidental
regarding losses must be
present for them to be
insured?
Who retains the option to Insurer
repair or replace
damaged property rather
than pay cash
settlements?
Main purpose of stock Profit maximization
companies?
Identify the two main Direct writers (work for one insurance company) and
distribution methods used independent brokers (work for multiple insurance
by insurers for their companies - can offer multiple options for insurance,
products not limited)
Major function of Share losses of the few among the many
insurance is to:
Does insurance allow Yes, replacement or repair
payment to be in another
form than money?
Chapter 2 - Insurance
Contracts
1) Rider (adding additional coverage)
2) Floater (provides coverage for items not on the
insured premise)
There are 4 ways changes
3) Endorsement (acknowledges changes in the actual
can be made to a policy.
contract)
What are the 4 ways?
4) Separate policy (additional coverage, but no
change in the original contract - new policy
altogether)
https://quizlet.com/1050404590/fundamentals-to-insurance-comprehensive-questions-and-verified-answers-detailed-elaborated-actual-exam-2025-te… 3/54
, 6/2/25, 7:15 AM Fundamentals to Insurance COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (DETAILED & ELABORATED) ACTUAL E…
1) Avoidance (don't buy the car in the first place)
2) Controlling (car alarms)
4 ways to deal with risk 3) Retention (increase in deductible or putting money
aside)
4) Transfer (buying insurance)
3 categories of risk Personal (health, anything directly affecting you),
insurance property (house, care), and liability (3rd party)
An agreement between two or more parties,
Define contract
enforceable at law
What are the 2 kinds of Pure risk (no chance for profit gain, insurable), and
risk? Which one is not speculative (chance for profit or loss, for example
insurable? gambling or starting a new business, not insurable)
Identify four options Avoidance, risk control, retention, transfer
people have when dealing
with risk
What type of risk control Loss prevention
reduces loss frequency?
Which method of dealing Insurance
with losses and risk is most
practical?
What type of risk is Pure risk
insurable?
Agreement (offer and unconditional acceptance),
consideration (exchange of something of value),
Identify 5 elements that
legality of object (not illegal), legal capacity of the
must be present in all
parties (not children, not mentally incompetent),
contracts
genuine intention (no inducement, needs to be
intended)
What is consideration? Exchange of something of value
Insurable interest (insured person derives a financial
3 unique elements of
or other kind of benefit), indemnity (no more no less),
insurance contracts
utmost good faith (honest, trust each other)
https://quizlet.com/1050404590/fundamentals-to-insurance-comprehensive-questions-and-verified-answers-detailed-elaborated-actual-exam-2025-te… 4/54
