#1
Which type of insurance policy provides coverage for multiple risks under a single contract?
Package policy
ExplanationPolicy covering various risks under one contract.
#2
What does the term 'indemnity' mean in the context of insurance?
Compensation for loss
ExplanationFinancial compensation to restore the insured to pre-loss condition.
#3
What does the term 'renewal provision' mean in insurance policies?
Automatic continuation of coverage
ExplanationPolicy's automatic extension at the end of its term.
#4
In insurance, what is the term for a person or entity that is covered by an insurance policy?
Insured
ExplanationIndividual or entity covered by the insurance policy.
#5
In insurance contract law, what is the principle of utmost good faith also known as?
Uberrimae Fidei
ExplanationLegal principle requiring full disclosure and honesty by both parties.
#6
Which of the following is a standard provision in an insurance policy that excludes coverage for intentional acts by the insured?
Exclusion clause
ExplanationPolicy provision denying coverage for intentional wrongdoing by the insured.
#7
What is the purpose of the coinsurance clause in property insurance?
To encourage full insurance
ExplanationEncourages insured to carry adequate coverage by sharing costs.
#8
Which type of insurance policy provides coverage for a specific period and pays a death benefit if the insured dies within that period?
Term life insurance
ExplanationCoverage for a specified time with death benefit.
#9
What is the waiting period in insurance policies often called, during which certain benefits are not payable?
Elimination period
ExplanationInitial period when policy benefits are not applicable.
#10
What is the purpose of an insurance deductible?
To discourage fraudulent claims
ExplanationAmount paid by insured before insurer covers the remaining cost.
#11
Which legal doctrine allows an insurance company to take legal action against a third party responsible for the insured's loss?
Subrogation
ExplanationInsurer's right to pursue legal action on behalf of the insured.
#12
What is the primary purpose of an insurance endorsement?
To modify the policy terms
ExplanationAmendment to change or add to the original policy terms.