#1
Which type of insurance provides coverage for damage to property caused by fire?
Property insurance
ExplanationCoverage for fire damage to property.
#2
What does the term 'premium' refer to in insurance?
The cost of the insurance policy
ExplanationThe amount paid for insurance coverage.
#3
What is a 'rider' in insurance?
An optional add-on to an insurance policy that provides additional coverage
ExplanationOptional coverage extension to a policy.
#4
What does 'exclusion' mean in insurance?
A provision in an insurance policy that limits coverage for certain risks or conditions
ExplanationLimitation on coverage for specified risks.
#5
What is 'policyholder' in insurance?
The person or entity that owns the insurance policy
ExplanationOwner of the insurance policy.
#6
What is the purpose of a deductible in insurance?
To require the insured to pay a portion of the claim amount
ExplanationTo share the cost of claims with the insured.
#7
What does the term 'co-insurance' mean in insurance?
The insured and the insurer share the risk and cost of claims
ExplanationShared risk and cost between the insured and insurer.
#8
What is the purpose of an insurance endorsement?
To extend or modify the coverage of an existing insurance policy
ExplanationAdjusting or adding coverage to an existing policy.
#9
What does 'subrogation' mean in insurance?
The process of recovering money from a third party to reimburse the insurer for a paid claim
ExplanationSeeking reimbursement from a third party for a paid claim.
#10
What is 'moral hazard' in insurance?
The tendency of insured individuals to take greater risks because they are protected against losses
ExplanationIncreased risk-taking due to insurance protection.
#11
What is 'reinsurance' in the context of insurance?
Insurance purchased by insurance companies to mitigate their own risk
ExplanationInsurance bought by insurers to manage their risk exposure.
#12
What is 'underwriting' in the insurance industry?
The process of evaluating and determining the risk of insuring a particular individual or entity
ExplanationAssessment of risk to determine insurance eligibility.
#13
In insurance, what does 'loss ratio' represent?
The ratio of claims paid by the insurer to the premiums collected
ExplanationRatio of claims paid to premiums collected.
#14
What is 'catastrophe insurance'?
Insurance that covers damage caused by a major disaster, such as a hurricane or earthquake
ExplanationCoverage for major disaster-related damage.
#15
What is 'self-insurance'?
A strategy where an individual or organization sets aside funds to cover potential losses instead of purchasing insurance
ExplanationFunding potential losses internally instead of buying insurance.