Insurance quiz

Which of the following types of valuation works best for property whose value does not fluctuate much? AMarket value BStated amount CInflation guard DAgreed value

agreed vaulue

Which of the following would be covered under personal injury liability? ASlander BA broken arm CA concussion DDeath

slander

Question 1 of 15 In forming an insurance contract, when does acceptance usually occur? AWhen an insured submits an application BWhen an insurer's underwriter approves coverage CWhen an insurer delivers the policy DWhen an insurer receives an application

b

WHICH OF THE FOLLOWINFg is an example of isnurance in the parent company

captive insurance

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? ALaw of group evaluation BLaw of large numbers CLaw of masses DLaw of averages

A. Law of group evaluation

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a ACancellation. BNonrenewal. CSuspension. DCessation.

B

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss? A$20,000 B$30,000 C$40,000 D$60,000

30,000

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

A.Older. B.More active. C.Larger. D.Smaller.

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as AReplacement cost. BActual cash value. CSpecific insurance. DStated amount.

Stated amount.

Which of the following is most likely to occur if it is determined by the audit that the deposit premium was too high? AAdditional premium will be collected. BThe insurer will have to pay a fine. CNothing; the premium cannot be adjusted. DThe insured will receive a return premium.

The insured will receive a return premium.

Liberalization

What Is a Liberalization Clause? A liberalization clause is an insurance policy provision that allows for adjustments to be made to existing coverage in order to comply with changes to relevant laws and regulations. Property insurance is the most likely place to find a liberalization clause.

Which of the following is true regarding a life insurance policy

it is the distribution of excess funds accumulated by the insurer on participating policies

The process of determining the premium charged and how much insurance is required for a particular loss is called ALoss valuation. BAgreed value. CLoss payment. DCoinsurance.

loss valuation

The part of a property policy that shows the amount of insurance, premium, and policy term is the AInsuring clause. BConditions. CEndorsements. DDeclarations.

d

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay? AEach policy will pay $25,000 of the loss. BEach policy will pay the total policy limits of $100,000. CThe first policy written will pay $75,000, and the other three policies will contribute proportionately to pay for the remaining $25,000. DThe policy with the earliest effective date will pay the entire loss, and the other policies will pay nothing.

A

The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a ABurglary. BBreaking and entering. CTheft. DRobbery.

ABurglary.

Contract of adheasion

Adhesion Contract — a contract (also known as a contract of adhesion) between two parties, where the terms and conditions are drafted by the party with superior bargaining power (typically a business) and the other party (typically a consumer) has little or no ability to negotiate more favorable terms, and, as a result, the consumer is placed in a "take-it-or-leave it" position. The courts carefully scrutinize adhesion contracts and will sometimes void certain provisions on the basis that the provisions are unconscionable or the product of unequal bargaining power.

contract of good faith

The doctrine of good faith requires that both parties to an insurance contract must honestly disclose all relevant information. As applied to the insurance company, this means honestly providing premium figures and coverage limitations. Applicants must truthfully disclose all requested pertinent personal information.

All of the following are considered parts of the policy structure EXCEPT AInsuring clause. BConditions. CProvisions. DExclusions.

c

Unilateral Contract

Unilateral Contract — a contract in which only one party makes an enforceable promise. Most insurance policies are unilateral contracts in that only the insurer makes a legally enforceable promise to pay covered claims. By contrast, the insured makes few, if any, enforceable promises to the insurer

All of the following are conditions commonly found in the insurance policy EXCEPT ASubrogation. BAppraisal. CInsuring agreement. DCancellation and nonrenewal.

c

The Federal Fair Credit Reporting Act ARegulates telemarketing. BPrevents money laundering. CRegulates consumer reports. DProtects customer privacy.

c

Adverse selction

The buyer knows more about their condition / health so they are in adv - the seller can sell them a policy that would be of advantage to them. Not nesarrily witholding information but not saying anything to benefit in a sale. they selct the buyer without knowing everything

What is an aleatory contract?

What Is an Aleatory Contract? An aleatory contract is an agreement whereby the parties involved do not have to perform a particular action until a specific, triggering event occurs. Events are those that cannot be controlled by either party, such as natural disasters and death. Aleatory contracts are commonly used in insurance policies. For example, the insurer does not have to pay the insured until an event, such as a fire that results in property loss. Aleatory contracts-also called aleatory insurance-are helpful because they typically help the purchaser reduce financial risk.

When a disagreement occurs as to how to settle a loss in a "fender bender" between two cars, what procedure is followed? AThe adjuster's first opinion must be accepted BArbitration through the court CA lawsuit is filed DAppeal to the DOI

atrribution through the court

All of the following are found in the declarations section of a policy EXCEPT the ALimits of insurance. BExclusions. CPolicy premiums. DName of the insured.

b

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of ABreach of warranty. BConcealment. CWaiver. DFraud.

b

In terms of parties to a contract, which of the following does NOT describe a competent party? AThe person must be mentally competent to understand the contract. BThe person must have at least completed secondary education. CThe person must not be under the influence of drugs or alcohol. DThe person must be of legal age.

b

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy AThe loss reimbursement will be paid to the mortgagee as their interest may appear. BThe mortgagee's rights of recovery will not be defeated by any act or neglect of the insured. CThe mortgagee may bring a suit in their own name to recover damages to covered property. DAll of the above are true.

d

Which of the following is not a characteristic of reinsurance

increases the unearned premium reserves