QUIZ - SECTION 1 Flashcards
Which of the following is not a class of insurance?
Casualty
Fire
Marine
Auto
Casulaty
Which of the following statements is true about reinsurance?
A - Property & casualty insurers use reinsurance, life insurers do not
B - When an insurer obtains reinsurance, it has sold the contract to another insurer, and no longer has direct responsibility for the policy.
C - Reinsurance is when the insured allows a policy to lapse for nonpayment. Later, if the insured makes the payment, the policy is reinsured
D - Reinsurance is the process whereby the insurer transfers all or part of the risk to another company.
Reinsurance is the process whereby the insurer transfers all or part of the risk to another company.
Which of the following is NOT required for a risk to be ideally insurable?
A - The loss must create economic hardship
B - The loss must be definite and measurable
C - The loss must occur on the insured’s property
D - The loss must be an accident
The loss must occur on the insured’s property.
Which of the following is an example of an adverse underwriting decision?
A - Issuing with limitations
B - All of these are examples
C- Rejecting the risk
D - Charging a higher rate
All of these are examples.
Any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest or create a liability against him/her, may be insured against. The more unpredictable a loss becomes:
A - The less it becomes insurable interest
B - the less insurable it becomes
C - The more it becomes insurable interest
D - The more it becomes insurable interest
C - The more insurable it becomes
Type of loss exposure pertaining to land and structures attached to it is:
A - liability loss exposure
B - Personal loss exposure
C - Financial loss exposure
D - property loss exposure
D - property loss exposure
A peril is:
A - a possibility of a loss
B - the actual cause of the loss
C - anything that increases the chance of loss or severity of loss
D - pure and speculative
B - the actual cause of a loss
According to the California insurance law, either party may rescind a contract for any of the following reasons EXCEPT:
A - Once a contract is signed, it can never be rescinded.
B - One party intentionally or unintentionally hides material information
C - If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract
D - One party intentionally omits information from the other party
A - Once a contract is signed, it can never be rescinded.
Loss control refers to:
A - a combination of risk control techniques with risk financing techniques
B - preventing a loss from becoming catastrophic
C - taking the necessary precautions that will reduce the risk of a loss
D - taking measures to prevent further damage during a loss
C - Taking the necessary precautions that will reduce the risk of a loss
The state of being subject to a loss is considered:
A - risk
B - hazard
C - exposure
D - insurance
C - exposure
Materiality is determined by the disadvantage placed on the other party and:
A - neither are correct
B - both are correct
C - the influence of the facts
D - not by the event
B - Both are correct
When a right or privilege has been given up, a party cannot reassert that right or privilege. The process of preventing the party from reasserting that right or privilege is known as:
A - estoppel
B - Pro-rate
C - Waiver
D - Indemnity
A - estoppel
A beautician stating that this conditioner fixes badly damaged hair is a:
A - stated fact
B - Implied warranty
C - representation
D - expressed warranty
B - Implied warranty
What are the two types of torts?
A - Pure & Speculative
B - Legal & Non-legal
C - Broad & Basic
D - Intentional & Unintentional
D - Intentional & unintentional
Performance depends upon an uncertain future event is the feature:
A - conditional
B - unilateral
C - aleatory
D - adhesion
C - aleatory
Punishment for twisting or misrepresentation would be:
A - up to 1 year in jail
B - both are correct
C - up to $25,000
D - neither are correct
B - both are correct
The uncertainty or chance of a loss occurring is known as:
A - risk
B - risk management
C - speculative risk
D - pure risk
A - Risk
A hazard that deals with a persons mental attitude, behavior and habits is an example of:
A - legal hazard
B - Moral hazard
C - Physical hazard
D - Morale Hazard
B - Moral hazard
Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain.
A - misrepresentation
B - theft
C - Fraud
D - Concealment
C - fraud
Which of the following is defined as an agreement between two or more parties enforceable by law?
A - Agreement clause
B - contract
C - Tort
D - Insurance policy
b - contract
Examples of tort law include all of the following EXCEPT:
A - libel and slander
B - Personal Injury
C - breach of contract
D - Bodily injury
C - breach of contract
The process of reviewing application for insurance and the information on the application is:
A - the job of the agent before accepting or rejecting an application
B - Underwriting
C - Field Underwriting
D - Application evaluation
B - Underwriting
The term loss exposure refers to:
A - the uncertainty of a loss occurring
B - the possibility of a loss
C - the increase in the possibility of a loss
D - the actual cause of the loss
B - the possibility of a loss
The degree of loss a person/organization faces from suits brought by a third party refers to:
A - liability loss exposure
B - human personnel loss exposure
c - Loss exposure
D - property exposure
A - liability loss exposure
