ch 1 general insurance

which of the following is the closest term to an authorized insurer ? a.licensed b.legal c.admitted d.certified

admitted

Representations are written or oral statements made by the applicant that are ? a.immaterial to the actual acceptability of the insurance contract b.considered true to the best of the applicant's knowledge c.guaranteed to be true d.found to be false after further investigation

considered true to the best of the applicant's knowledge

which of the following best describes the aleatory nature of an insurance contract ? a.policies are submitted to the insurer on a take it or leave it basis b.exchange of unequal values c.only one of the parties being legally bound by the contract d.ambiguities are interpreted in favor of the insured

exchange of unequal values

which of the following types of agent authority is also called perceived authority ? a.fiduciary b.apparent c.express d.implied

apparent

an individual was involved in an head on collision while driving home one day his injuries were not serious and he recovered However he decided that in order to never be involved in another accident he would not drive or ride his car ever again. which method of risk management does this describe ? a.sharing b.retention c.avoidance d.reduction

avoidance

which of the following is an accurate comparison between government and private insurance? a. private insurers provide insurance in areas where the government will not b.private insurers may be authorized to transact insurance by state insurance departments c.insurance provided by the govt is called federal insurance d.private insurers offer fewer lines of insurance than govt insurers

b.private insurers may be authorized to transact insurance by state insurance departments

an insurance producer who by contract is bound to write insurance for only one company or group of companies is classified as an ? a.solicitor b.broker c.independent producer d.captive agent

captive agent

A producer who fails to segregate premium monies from his own personal funds is guilty of ? a.commingling b.larceny c.embezzlement d.theft

commingling

when both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable the contract is a.personal b.unilateral c.conditional d.aleatory

conditional

the authority granted to an agent through the agents contract is referred to as a.apparent authority b.implied authority c.absolute authority d.express authority

express authority

the risk of loss maybe classified as ? a.named and un-named risk b.high risk and low risk c. pure risk and speculative risk d.certain risk and uncertain risk

pure risk and speculative risk

installing deadbolt locks on the doors of homes is an example of which method of handling a risk ? a.reduction b.avoidance c transfer d self insurance

reduction

A situation in which a person can only lose or have no change represents ? a. speculative risk b.adverse selection c.hazard d.pure risk

pure risk

In insurance an offer is usually submitted ? a.the agent hands the policy to the policyholder b.an agent explains the policy to a potential applicant c.the completed application is submitted d. the insurer approves the application and receives the initial premium

the completed application is submitted

Not all losses are insurable and there are certain requirements that must be met before a risk is a proper subject for insurance these requirements include all of the following except ? a.the loss produced by the risk must be definite b.the loss maybe intentional c.the loss must not be catastrophic d.there must be a sufficient number of homogeneous exposure units to make losses reasonable predictable

the loss maybe intentional