Section 1 Quiz
Materiality is determined by the disadvantage placed on the other party and:
Both - Not by the event, the influence of the facts.
Examples of a tort law include all of the following EXCEPT:
Breach of Contract.
Insurance is a contract whereby one undertakes to indemnify another against:
Damage
A hazard that deals with a person's mental attitude, behavior, and habits is an example of:
Moral hazard
Which of the following is an example of an adverse underwriting decision?
ALL - Charging a higher rate, Rejecting the risk, Issuing with limitation.
Bob is thinking about obtaining insurance because he just found out he needs extensive surgery that will require several days in the hospital. This situation of waiting until the last minute to obtain insurance is known as:
Adverse Selection
Performance depends upon an uncertain future event is the feature:
Aleatory
A hazard is best described as:
Anything that increases the chance of loss or severity of loss due to a peril.
Which of the following is NOT a known private insurer?
Bond Insurance Companies
Punishment for twisting or misrepresentation would be:
Both - $25,000/1 year in jail.
Which of the following is not a class of insurance?
Casualty
Which of the following elements of a contract is/are the binding force?
Consideration
Which of the following is defined as "an agreement between two or more parties enforceable by law"?
Contract
Which of the following is the amount of money the insured pays before the insurer pays for the rest of the claim?
Deductible
When a right or privilege has been given up, a party cannot reassert hat right or privilege. The process of preventing the party from reasserting that right or privilege is known as:
Estoppel.
The state of being subject to a loss is considered:
Exposure
Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain?
Fraud.
A beautician stating that this conditioner fixes badly damaged hair is a/an:
Implied warranty.
Restoring the insured back to the condition he or she was in before the loss occurred is known as:
Indemnification
Substitution of a small certain loss for a large uncertain loss is:
Insurance
What are the two type of torts?
Intentional and Unintentional
According to the California insurance law, either party may rescind a contract for any of the following reasons EXCEPT:
Once a contract is signed, it can never be rescinded.
Type of loss exposure pertaining to land and structures attached to it is:
Property Loss exposure
The uncertainty or chance of a loss occurring is known as:
Risk
Which of the following are the main types of risks?
Speculative and Pure
When an insured rejects uninsured motorist insurance in writing this is considered:
waiver
The term "loss exposure" refers to:
The possibility of a loss.
The degree of loss a person/organization faces from suits brought by a third party refers to:
Liability Loss Exposure
Which of the following statements is true about reinsurance?
Reinsurance is the process whereby the insurer transfer all or part of the risk to another company.
Loss control refers to:
Takes the necessary precautions that will reduce the risk of loss.
A peril is:
The actual cause of the loss.
The law of large numbers is a principle that basic all says:
The larger the amount of information gathered, the more reliable that information will be.
Which of the following is NOT required for a risk to be ideally insurable?
The loss must occur on the insured's property.
Any contingent or unknown event, whether past or future, which may damning a person having an insurable interest, or create a liability against him.her, may be insured against. The more predictable a loss becomes:
The more insurable it becomes
The process of reviewing applications for insurance and the information on the application is:
Underwriting