RMIN 4000 UGA Test 1. Chapters 1-3 |
Latest Update | 2024/2025 | Graded A+
What is risk in the context of insurance?
A) A situation where loss is certain
B) Uncertainty concerning the occurrence of a loss
C) A guarantee of financial gain
D) The absence of any potential hazards
✔✔ B) Uncertainty concerning the occurrence of a loss
What is the primary purpose of insurance?
A) To eliminate all risks
B) To transfer risk to an insurer
C) To avoid losses
D) To increase wealth
✔✔ B) To transfer risk to an insurer
Which of the following is an example of pure risk?
A) Investing in the stock market
1
,B) Starting a new business
C) The possibility of a house fire
D) Opening a new savings account
✔✔ C) The possibility of a house fire
What does "risk management" involve?
A) Avoiding all risks
B) Identifying and handling risks
C) Ignoring risks until they happen
D) Transferring all risks to third parties
✔✔ B) Identifying and handling risks
What is the term for the amount paid by the policyholder to the insurance company in exchange
for coverage?
A) Deductible
B) Premium
C) Claim
D) Benefit
2
,✔✔ B) Premium
Which type of risk can be both insurable and uninsurable depending on the circumstances?
A) Fundamental risk
B) Speculative risk
C) Pure risk
D) Financial risk
✔✔ B) Speculative risk
What is a deductible in an insurance policy?
A) The amount paid by the insurer to settle a claim
B) The amount the policyholder pays before the insurance coverage kicks in
C) The total cost of the insurance policy
D) The bonus paid for having no claims
✔✔ B) The amount the policyholder pays before the insurance coverage kicks in
What is the role of an insurance underwriter?
A) To settle claims
3
, B) To determine the premium rates
C) To assess and decide whether to accept the risk and under what terms
D) To enforce insurance regulations
✔✔ C) To assess and decide whether to accept the risk and under what terms
Which principle states that the insured should not profit from a loss but should be restored to the
same financial position as before the loss?
A) Subrogation
B) Indemnity
C) Contribution
D) Utmost Good Faith
✔✔ B) Indemnity
Which of the following is an example of moral hazard?
A) Leaving your car unlocked because you have insurance
B) Driving carefully due to poor road conditions
C) Installing a security system to protect your home
D) Reducing your insurance coverage after making improvements
4
Latest Update | 2024/2025 | Graded A+
What is risk in the context of insurance?
A) A situation where loss is certain
B) Uncertainty concerning the occurrence of a loss
C) A guarantee of financial gain
D) The absence of any potential hazards
✔✔ B) Uncertainty concerning the occurrence of a loss
What is the primary purpose of insurance?
A) To eliminate all risks
B) To transfer risk to an insurer
C) To avoid losses
D) To increase wealth
✔✔ B) To transfer risk to an insurer
Which of the following is an example of pure risk?
A) Investing in the stock market
1
,B) Starting a new business
C) The possibility of a house fire
D) Opening a new savings account
✔✔ C) The possibility of a house fire
What does "risk management" involve?
A) Avoiding all risks
B) Identifying and handling risks
C) Ignoring risks until they happen
D) Transferring all risks to third parties
✔✔ B) Identifying and handling risks
What is the term for the amount paid by the policyholder to the insurance company in exchange
for coverage?
A) Deductible
B) Premium
C) Claim
D) Benefit
2
,✔✔ B) Premium
Which type of risk can be both insurable and uninsurable depending on the circumstances?
A) Fundamental risk
B) Speculative risk
C) Pure risk
D) Financial risk
✔✔ B) Speculative risk
What is a deductible in an insurance policy?
A) The amount paid by the insurer to settle a claim
B) The amount the policyholder pays before the insurance coverage kicks in
C) The total cost of the insurance policy
D) The bonus paid for having no claims
✔✔ B) The amount the policyholder pays before the insurance coverage kicks in
What is the role of an insurance underwriter?
A) To settle claims
3
, B) To determine the premium rates
C) To assess and decide whether to accept the risk and under what terms
D) To enforce insurance regulations
✔✔ C) To assess and decide whether to accept the risk and under what terms
Which principle states that the insured should not profit from a loss but should be restored to the
same financial position as before the loss?
A) Subrogation
B) Indemnity
C) Contribution
D) Utmost Good Faith
✔✔ B) Indemnity
Which of the following is an example of moral hazard?
A) Leaving your car unlocked because you have insurance
B) Driving carefully due to poor road conditions
C) Installing a security system to protect your home
D) Reducing your insurance coverage after making improvements
4
