5905157
Descripción
Test por Heather Donaldson, actualizado hace más de 1 año
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Creado por Heather Donaldson
hace casi 8 años
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Pregunta 1
Pregunta
A monoline policy:
Respuesta
-
Is a property that is written to cover property only
-
Is any insurance written as a single line policy
-
Is a policy that covers only lines of insurance which cannot be part of package policies
-
There is no such thing
Pregunta 2
Pregunta
A risk is:
Respuesta
-
A peril
-
Certainty of loss
-
Proximate cause
-
Uncertainty of loss
Pregunta 3
Pregunta
A pure risk involves a chance of:
Respuesta
-
Gain
-
Loss
-
Both A&B
-
Neither A&B
Pregunta 4
Pregunta
A risk management technique that eliminates a loss exposure and reduces the chance of loss to zero is:
Respuesta
-
Loss prevention
-
Retention
-
Loss reduction
-
Avoidance
Pregunta 5
Pregunta
When suffering is a covered loss, an insured individual should do which of the following?
Respuesta
-
Send a list of items damaged stating the quantity and receipts of purchase
-
Submit to an interview with the insurers representative without any other person present
-
Notify the police if there is a theft loss
-
All of the above
Pregunta 6
Pregunta
How many days does an insurer hve to return unearned premiums to an insured?
Respuesta
-
10 days
-
15 days
-
25 days
-
30 days
Pregunta 7
Pregunta
The amount to replace property with like property of the same quality and construction is the:
Respuesta
-
Replacement cost
-
Actual cash value (ACV)
-
Market value
-
Stated value
Pregunta 8
Pregunta
What is actual cash value (ACV)?
Respuesta
-
ACV = replacement cost + depreciation
-
ACV = market value - depreciation
-
ACV = replacement cost - depreciation
-
ACV = stated cost - depreciation
Pregunta 9
Pregunta
If an individual or a family suffers a loss due to death or disability of a member, what type of loss is it?
Respuesta
-
Personal loss
-
Personnel loss
-
Human loss
-
Needs loss
Pregunta 10
Pregunta
Insurance has a number of characteristics. Which of the following is not one of them?
Respuesta
-
If there is ambiguous language i an insurance contract, it will be resolved in the favor of the insured
-
Parties to a contract should be able to rely upon the honest representations of the other party
-
It involves a catastrophic exposure
-
The insurer is bound to perform under the contract
Pregunta 11
Pregunta
Which of the following is an example of loss retention?
Respuesta
-
Buying health insurance
-
Not purchasing collision insurance on your auto
-
Placing a watercraft endorsement on your homeowner's policy
-
Removing dried brush from your house's premises
Pregunta 12
Pregunta
If it is proven that another person's negligence contributed to an injury, what gives the injured party the right to seek compensation?
Respuesta
-
Case law
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Contract law
-
Criminal law
-
Tort law
Pregunta 13
Pregunta
Which of the following statements is true regarding compensatory damages?
Respuesta
-
General damages have specific economic value
-
Punitive damages are awarded to a person for actual pain and suffering
-
Special damages do not have a specific economic value
-
There is usually no direct correlation between the amount of general and special damages awarded to the victim
Pregunta 14
Pregunta
Liability losses are referred to as:
Respuesta
-
First party losses
-
Second party losses
-
Third party losses
-
None of the above
Pregunta 15
Pregunta
In an insurance contract, D. I. C. E. refers to:
Respuesta
-
Declarations, insurable interest, conditions, and exclusions
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Declarations, insurable interest, conditions, and endorsements
-
Declarations, insuring clause, conditions and endorsements
-
Declarations, insuring clause, conditions, and exclusions
Pregunta 16
Pregunta
An insured purchased new furniture for $6,000. At the time of a fire loss, it had depreciated $2,000. At current rates, the same furniture will cost $7,000 to replace. The actual cash value of the destroyed furniture is:
Respuesta
-
$7,000
-
$8,000
-
$6,000
-
$5,000
Pregunta 17
Pregunta
When an insurer cancels a policy and only retains earned premium, this is:
Respuesta
-
Flat cancellation
-
Short rate cancellation
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Pro-rata cancellation
-
Continuous cancellation
Pregunta 18
Pregunta
An insurers loss reserve for a claim is:
Respuesta
-
Equal to claims paid divided by earned premium reserve, not including loss adjustment expense
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The maximum amount the insurer wil have to pay to close the claim
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The exact amount the insurer will have to pay to close the claim
-
An estimate of the amount that the insurer will pay
Pregunta 19
Pregunta
What is the process called whereby insurers decide which customers to insure and what coverage to offer?
Respuesta
-
Adverse selection
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Rate making
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Marketing
-
Underwriting
Pregunta 20
Pregunta
A reduction in the value of property that results immediately from damage to the property is known as:
Respuesta
-
Additional living expense
-
Consequential loss
-
Extra expense
-
Direct loss
Pregunta 21
Pregunta
The process whereby an insured suffers a loss and is paid to return him to his prior financial condition is:
Respuesta
-
Insurable interest
-
Pure risk
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Indemnity
-
Ceding
Pregunta 22
Pregunta
What is a hazard?
Respuesta
-
Anything that increases the chance of loss
-
A broken promise
-
Any possibility of financial loss
-
A peril or loss of property
Pregunta 23
Pregunta
A policy may not be transferred to another without:
Respuesta
-
Oral consent of the insured
-
Oral consent of the insurer
-
Written consent of the insured
-
Written consent of the insurer
Pregunta 24
Pregunta
Which of the following is a true statement about insurance?
Respuesta
-
It is a method of transferring risk
-
It is for the low income/high risk persons
-
It is sold by government officials
-
It is a method of retention
Pregunta 25
Pregunta
Grouping people by similar characteristics is:
Respuesta
-
Unfair discrimination
-
Prejudice
-
Fair discrimination
-
A basic principle of insurance
Pregunta 26
Pregunta
A peril is defined as:
Respuesta
-
A cause of loss
-
Increases the chance of loss
-
A hazard
-
An accident
Pregunta 27
Pregunta
The main purpose of insurance is to:
Respuesta
-
Transfer the risk
-
Reduce perils
-
Avoid hazards
-
Reduce the risk
Pregunta 28
Pregunta
The insured should be compensated for his loss, returning him to the condition that existed prior to the loss. The is the principle of indemnity. Which of the following is correct?
Respuesta
-
It is based on the law of small numbers
-
It is a basic principle of insurance
-
It is based on the law of supply and demand
-
It involves the principle of adhesion
Pregunta 29
Pregunta
Which of the following is an example of loss retention?
Respuesta
-
Buying life insurance
-
Not purchasing collision insurance on your auto
-
Placing a motorcycle endorsement on your homeowners policy
-
Removing dried brush from your house's premises
Pregunta 30
Pregunta
Which of the following is an example of reducing risk probability?
Respuesta
-
Buying OTC
-
Reducing premium payments
-
Increasing deductibles
-
Putting a fence around a pool
Pregunta 31
Pregunta
Which of the following is not a benefit of insurances?
Respuesta
-
It can be a source of investment funds
-
It transfers loss
-
It reduces risk exposure
-
It reduces out of pocket expenses
Pregunta 32
Pregunta
A house located next to a dynamite plant is considered what kind of hazard?
Respuesta
-
Moral
-
Legal
-
Physical
-
Liability
Pregunta 33
Pregunta
Where is a policy personalized to say who is covered, what is covered, limit of insurance, and policy period?
Respuesta
-
Insuring clause
-
Declarations
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Conditions
-
Endorsements
Pregunta 34
Pregunta
An insured suffers a loss caused by a third party. How will the insured's insurance company handle the claim?
Respuesta
-
The company will not cover the loss
-
The company will have to seek reimbursement himself from the third party
-
The insurer will cover a portion of the loss
-
The insurer will pay the insured for a covered loss and seek reimbursement from the party at fault with the cooperation of the insured
Pregunta 35
Pregunta
The insurer's right to recover its claim payment to an insured from a negligent third party is known as:
Respuesta
-
Arbitration
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Liberalization
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Subrogation
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Assignment
Pregunta 36
Pregunta
If an insured voluntarily relinquishes his rights, this is an example of:
Respuesta
-
Estoppel
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Coercion
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Waiver
-
Warranty
Pregunta 37
Pregunta
The amount to replace property with like property of the same quality and construction is the:
Respuesta
-
Replacement cost
-
Actual cash value
-
Market value
-
Stated value
Pregunta 38
Pregunta
When an insurance policy is cancelled by the insured, and the company retains premium for the protection provided plus expenses, cancellation is said to be on a:
Respuesta
-
Flat basis
-
Short rate basis
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Pro rata basis
-
Fixed basis
Pregunta 39
Pregunta
An insurer cancels a policy and returns the entire premium. This is:
Respuesta
-
Short rate
-
Pro rata
-
Flat cancellation
-
No fault
Pregunta 40
Pregunta
How many days does an agent have to return unearned premium to an insured?
Respuesta
-
25 days
-
10 days
-
30 days
-
15 days
Pregunta 41
Pregunta
How many days does an insurance company have to give unearned premium back to an agent?
Respuesta
-
10 days
-
15 days
-
25 days
-
30 days
Pregunta 42
Pregunta
Insurers may purchase reinsurance for a variety of reasons. Which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance:
Respuesta
-
Only on the below average business submitted to them, keeping the good business for themselves.
-
To avoid capacity problems by reducing the amount of unearned premium
-
To more safely insure an exceptionally large account
Pregunta 43
Pregunta
Which insurance company is owned and formed for the benefit of its members?
Respuesta
-
Llloyds of London
-
A mutual insurer
-
Demutualization
-
Captive companies
Pregunta 44
Pregunta
What effect does increasing a deductible have on a policy?
Respuesta
-
Increases the premium payment
-
Reduces the premium payment
-
Increases likelihood of getting insurance
-
Increases insurance policy benefits
Pregunta 45
Pregunta
The method in which insurance companies receive approval from the DOI before using certain rates:
Respuesta
-
Prior approval
-
Underwriting
-
Reinsurance
-
Coinsurance
Pregunta 46
Pregunta
Which of the following is not a method for risk management?
Respuesta
-
Transfer
-
Avoidance
-
Retention
-
Variance
Pregunta 47
Pregunta
The system in which insurers determine who to insure and that rates to charge is known as
Respuesta
-
Insurance
-
Underwriting
-
Indemnity
-
Reinsurance
Pregunta 48
Pregunta
Insurance companies transfer part of a particularly large risk through what process:
Respuesta
-
Reinsurance
-
Indemnity
-
Underwriting
-
Transfer
Pregunta 49
Pregunta
Insurance contracts are between how many parties?
Respuesta
-
4
-
3
-
1
-
2
Pregunta 50
Pregunta
The total amount an insurance company is liable to pay out is:
Respuesta
-
Policy total
-
Limit of insurance
-
Aggregate limit
-
Indemnity
Pregunta 51
Pregunta
A speculative risk, like a pure risk, is insurable:
Respuesta
- True
- False
Pregunta 52
Pregunta
To qualify as an insurable risk:
Respuesta
-
Losses must be definable
-
Losses must be accidental
-
Losses must be enough to cause hardship to the insured
-
All of the above
Pregunta 53
Pregunta
Aleatory in nature refers to:
Respuesta
-
Ambiguous language
-
Enforeable
-
Unequal exchange by two parties
-
Waiver of a promise
Pregunta 54
Pregunta
Because insurance is a contract of adhesion, ambiguous language in a contract will show which party at fault:
Respuesta
-
Insurance company
-
MGA
-
Insured
-
Agent
Pregunta 55
Pregunta
Failure to disclose material fact is:
Respuesta
-
Concealment
-
Fraud
-
Waiver
-
Estoppels
Pregunta 56
Pregunta
Misrepresentation, deceit, or trickery can be defined as:
Respuesta
-
Materiality
-
False warrant
-
Conditional concealment
-
Fraud
Pregunta 57
Pregunta
Provisions that deny coverage for certain perils:
Respuesta
-
Exclusions
-
Declarations
-
Endorsements
-
Conditions
Pregunta 58
Pregunta
The insuring agreement contains all of the following except:
Respuesta
-
Perils insured against
-
Persons/property covered
-
Location
-
Exclusions
Pregunta 59
Pregunta
Assignment/transfer cannot be made without written consent from:
Respuesta
-
Additional insured
-
Agent
-
First named insured
-
Insurer
Pregunta 60
Pregunta
A deductible is the portion of a loss retained by the insured before the insurer will cover a claim.
Respuesta
- True
- False
Pregunta 61
Pregunta
To what does lapse refer?
Respuesta
-
The insurer decides not to continue insuring a customer
-
The insured voluntarily cancels their coverage
-
Termination due to non-payment
-
A policy that is cancelled upon its effective date
Pregunta 62
Pregunta
Insureds must comply with certain provisions when submitting a claim. These include:
Respuesta
-
Prompt notice of loss or damage
-
Submitting claims
-
Notifying the police if theft is involved
-
All answers are correct
Pregunta 63
Pregunta
Coinsurance refers to the amount of insurance an insured must carry in order to be fully insured
Respuesta
- True
- False
Pregunta 64
Pregunta
What is unoccupied?
Respuesta
-
There are people living in the building but no furniture
-
There may be furniture but no people in a building
-
No people and no furniture
-
The same as vacant
Pregunta 65
Pregunta
Which of the following must be on ALL insurance policies?
Respuesta
-
Parties of the contract
-
Insurable interest
-
Term of the policy
-
All answers are correct
Pregunta 66
Pregunta
To what does insurable interest mean?
Respuesta
-
A loss to the property would have some financial loss for the person
-
A loss that the insured would like to cover through insurance
-
Property taken over by an insurer to reduce loss
-
All of the above
Pregunta 67
Pregunta
A term that refers to a situation in which two or more perils cause a loss
Respuesta
-
Peril
-
Open peril
-
Consequential loss
-
Concurrent causation
Pregunta 68
Pregunta
A consequential loss is not directly caused by a peril but assumed as a result of a direct loss
Respuesta
- True
- False
Pregunta 69
Pregunta
In order for negligence to exist, which of the following must be present?
Respuesta
-
Breach of the duty to act
-
Occurrence of injury or damage
-
Duty to act
-
All of the above
Pregunta 70
Pregunta
Compensatory damages in a hearing will generally determine the amount of punitive damages
Respuesta
- True
- False
Pregunta 71
Pregunta
An event that results in a loss to an insured at a definite time and place or due to repeated exposure can be defined as
Respuesta
-
Negligence
-
Occurrence
-
Accident
-
None of the above
Pregunta 72
Pregunta
Through what kind of liability can a person be held responsible for the actions of others. IE: negligent acts of a child or employee
Respuesta
-
Strict
-
Absolute
-
Vicarious
-
Intentional
Pregunta 73
Pregunta
An insurer organized in a state outside the state of California can be referred to as what kind of insurer?
Respuesta
-
Domestic
-
Foreign
-
Alien
-
Admitted
Pregunta 74
Pregunta
What department is set up in order to regulate insurance rates?
Respuesta
-
DOI
-
The FAIR plan
-
CAARP
-
ISO
Pregunta 75
Pregunta
A person that solicits, negotiates and effects contracts on behalf of an insurer is a:
Respuesta
-
Agent (Producer)
-
Captive agent
-
Solicitor
-
Independent agent
Pregunta 76
Pregunta
A person that sells insurance for only one company is:
Respuesta
-
Agent
-
Broker
-
Captive agent
-
Independent agent
Pregunta 77
Pregunta
A fiduciary must hold funds and property in a position of trust. They must also:
Respuesta
-
Act in a prudent fashion
-
Act as an agent
-
Commingle money
-
Misappropriate funds
Pregunta 78
Pregunta
An illegal practice which occurs when an agent mixes personal funds with the insured's or insurer's funds:
Respuesta
-
Theft
-
Stealing
-
Commingling
-
Robbery
Pregunta 79
Pregunta
An incorporated insurer owned by its policy holders and formed for their benefit is called
Respuesta
-
Stock insurer
-
Mutual insurer
-
Independent Insurer
-
Broker insurer
Pregunta 80
Pregunta
A way for insurers to avoid having to pay for large or catastrophic losses
Respuesta
-
Claims handling
-
Avoidance
-
Reinsurance
-
Underwriting
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