FUNDAMENTALS OF INSURANCE - LICENSING PRACTICE
EXAM 2 | QUESTIONS WITH 100% CORRECT ANSWERS |
UPDATED 2024 | GUARANTEED A
1. To "Bind a Risk" means:
a. Having authority from the Insurer to put insurance in force
b. Finding a company willing to give a quote on a risk
c. Getting underwriting information from a client
d. Automatically renewing an existing policy
ANSWER :->>> a. Having authority from the Insurer to put insurance in force
"Subrogation"d means:
a. The right of the insurance company to recover payments made under the policy
from another person who is legally responsible for the loss
b. Theamount of the insurance company receives from a person who is legally
responsible for a loss
c. That the insurance company takes over the salvage after it has paid the claim in full
d. That the Insured has the option of receiving payment for the loss from either
the insurer or the person responsible
ANSWER :->>>a. The right of the insurance company to recover payments
made under the policy from another person who is legally responsible for the
,loss
Insurance coverage under the terms of the policy of "fire" insurance expires at:
a. 12:01 a.m. Standard Time at the location of the property insurance
b. 12:01 p.m. Standard Time at the location of the property insured
c. Twelve months after the broker binds coverage
d. 12:01 a.m. Standard Time at the address of the named insured
ANSWER :->>>d. 12:01 a.m. Standard Time at the address of the named insured
In the contract of Insurance, "consideration" means:
a. Something of value
b. The amount of the Insured can collect in event of a claim
c. The object of insurance
d. The
reviewing of the details of the risk to be insured by an underwriter
ANSWER:->>>a. Something of value
An Insurance Contract indemnifies the Insured against loss arising out of the
happening of the specific event. Which of the following is correct?
a. The event must be a future event and it must be accidental
b. The event may happen with the co-operation of the insured
,c. The event may happen with the intent of the insured
d. All of the above
ANSWER:->>>a. The event must be a future event and it must be accidental
"Indemnify" means:
a. Returning the premium of the Insured
b. Restoring the Insured to the same financial position as he was in immediately prior
to the loss
c. Paying the Insured the face amount of the policy
d. Restoring the insured to the same financial position as he was in at the inception
date of the policy
ANSWER:->>>b. Restoring the Insured to the same financial position as he was in
immediately prior to the loss
Under the Indemnity Agreement of the Fire Policy it states it will pay the lesser of
three amounts in the event of a claim. One factor which does NOT enter into this
calculation is:
a. The actual cash value of the property
b. The original cost of the property
c. The insured's interest in the property
d. The policy limit
, ANSWER:->>>b. The original cost of the property
A physical hazard is:
a. A type of peril
b. The same as a moral hazard
c. A physical feature of a risk, which may give rise to a loss
d. The possibility of a loss due to the character of the insured
ANSWER:->>>c. A physical feature of a risk, which may give rise to a loss
The following is the most practical way in which to deal with risk:
a. Transfer of risk
b. Retention of risk
c. Controlling of Risk
d. Avoidance of Risk ANSWER:->>>a. Transfer of risk
If a policy has been cancelled by the insurance Company before the term has
expired:
a. The commission is fully earned
b. The total premium is returned
c. Part of the commission, corresponding to the unearned portion of the premium
EXAM 2 | QUESTIONS WITH 100% CORRECT ANSWERS |
UPDATED 2024 | GUARANTEED A
1. To "Bind a Risk" means:
a. Having authority from the Insurer to put insurance in force
b. Finding a company willing to give a quote on a risk
c. Getting underwriting information from a client
d. Automatically renewing an existing policy
ANSWER :->>> a. Having authority from the Insurer to put insurance in force
"Subrogation"d means:
a. The right of the insurance company to recover payments made under the policy
from another person who is legally responsible for the loss
b. Theamount of the insurance company receives from a person who is legally
responsible for a loss
c. That the insurance company takes over the salvage after it has paid the claim in full
d. That the Insured has the option of receiving payment for the loss from either
the insurer or the person responsible
ANSWER :->>>a. The right of the insurance company to recover payments
made under the policy from another person who is legally responsible for the
,loss
Insurance coverage under the terms of the policy of "fire" insurance expires at:
a. 12:01 a.m. Standard Time at the location of the property insurance
b. 12:01 p.m. Standard Time at the location of the property insured
c. Twelve months after the broker binds coverage
d. 12:01 a.m. Standard Time at the address of the named insured
ANSWER :->>>d. 12:01 a.m. Standard Time at the address of the named insured
In the contract of Insurance, "consideration" means:
a. Something of value
b. The amount of the Insured can collect in event of a claim
c. The object of insurance
d. The
reviewing of the details of the risk to be insured by an underwriter
ANSWER:->>>a. Something of value
An Insurance Contract indemnifies the Insured against loss arising out of the
happening of the specific event. Which of the following is correct?
a. The event must be a future event and it must be accidental
b. The event may happen with the co-operation of the insured
,c. The event may happen with the intent of the insured
d. All of the above
ANSWER:->>>a. The event must be a future event and it must be accidental
"Indemnify" means:
a. Returning the premium of the Insured
b. Restoring the Insured to the same financial position as he was in immediately prior
to the loss
c. Paying the Insured the face amount of the policy
d. Restoring the insured to the same financial position as he was in at the inception
date of the policy
ANSWER:->>>b. Restoring the Insured to the same financial position as he was in
immediately prior to the loss
Under the Indemnity Agreement of the Fire Policy it states it will pay the lesser of
three amounts in the event of a claim. One factor which does NOT enter into this
calculation is:
a. The actual cash value of the property
b. The original cost of the property
c. The insured's interest in the property
d. The policy limit
, ANSWER:->>>b. The original cost of the property
A physical hazard is:
a. A type of peril
b. The same as a moral hazard
c. A physical feature of a risk, which may give rise to a loss
d. The possibility of a loss due to the character of the insured
ANSWER:->>>c. A physical feature of a risk, which may give rise to a loss
The following is the most practical way in which to deal with risk:
a. Transfer of risk
b. Retention of risk
c. Controlling of Risk
d. Avoidance of Risk ANSWER:->>>a. Transfer of risk
If a policy has been cancelled by the insurance Company before the term has
expired:
a. The commission is fully earned
b. The total premium is returned
c. Part of the commission, corresponding to the unearned portion of the premium
