#1
Which type of insurance provides coverage for damage to your own vehicle in an accident?
Collision insurance
ExplanationCoverage for damages to your own vehicle in an accident.
#2
In health insurance, what is the purpose of 'co-payments'?
To share the cost of medical expenses between the insured and the insurer
ExplanationSplitting medical costs between insured and insurer.
#3
What does the term 'underwriting' mean in the context of insurance?
Assessing risk and setting terms
ExplanationProcess of evaluating risk and determining policy terms.
#4
In insurance, what is a 'rider'?
An additional coverage attached to a policy
ExplanationExtra coverage added to a policy beyond the basic terms.
#5
What is the primary purpose of reinsurance in the insurance industry?
To transfer risk from one insurer to another
ExplanationProcess of shifting risk from one insurer to another.
#6
What is the purpose of an 'endorsement' in an insurance policy?
To modify or add coverage to the policy
ExplanationAction of altering or adding coverage to a policy.
#7
In life insurance, what is the 'contestability period'?
The period during which the insurer can contest the validity of the policy
ExplanationTimeframe in which insurer can contest policy validity.
#8
What is the key function of the National Flood Insurance Program (NFIP) in the United States?
To make flood insurance accessible and affordable
ExplanationObjective of ensuring affordability and accessibility of flood insurance.
#9
What does 'cancellation' mean in insurance terms?
The termination of a policy before its expiration date
ExplanationEnding of policy before scheduled expiration.
#10
What is 'insurable interest' in insurance?
The financial stake a policyholder has in the insured property or person
ExplanationFinancial interest the policyholder has in insured entity.
#11
What is 'renewal' in the context of insurance policies?
The extension of an existing policy term with the same terms and conditions
ExplanationExtending existing policy with unchanged terms.
#12
What does 'salvage value' represent in insurance claims?
The value of property that can be recovered or sold after a loss
ExplanationValue of property recoverable or saleable post-loss.
#13
What is the main purpose of an insurance policy's 'declaration page'?
To provide a summary of the key details of the policy
ExplanationSummary of crucial policy details.
#14
In insurance, what does the term 'exclusion' refer to?
The items or conditions not covered by the policy
ExplanationItems or conditions not covered by the policy.
#15
What does 'sublimit' mean in insurance policy terms?
A limit set within a broader coverage limit for a specific type of loss
ExplanationLimit within broader coverage for specific loss type.
#16
What does the term 'coinsurance' refer to in health insurance?
The percentage of costs paid by the insured after the deductible is met
ExplanationPortion of costs paid by the insured after deductible.
#17
What is the purpose of a 'deductible' in insurance?
To specify the amount the insured must pay before the insurance coverage begins
ExplanationAmount the insured pays before coverage starts.
#18
In property insurance, what does the term 'actual cash value' represent?
The value of the property at the time of loss, considering depreciation
ExplanationProperty value at loss, factoring in depreciation.
#19
What does the term 'moral hazard' mean in insurance?
The increased likelihood of a loss due to the policyholder's behavior
ExplanationHigher risk of loss due to policyholder behavior.
#20
In insurance, what is 'subrogation'?
The legal right of the insurer to pursue a third party for a claim payment
ExplanationInsurer's legal right to seek payment from third parties.
#21
What is 'residual risk' in insurance?
The risk that remains after deductibles and coverage limits are applied
ExplanationRisk left after deductibles and limits are accounted for.
#22
In auto insurance, what does 'no-fault insurance' mean?
Fault is not determined, and each party's insurance covers their damages
ExplanationCoverage where fault is not assigned and each party's insurance covers their damages.
#23
In insurance, what is the purpose of 'loss control'?
To prevent losses from occurring
ExplanationObjective of preventing losses.
#24
What is 'mortality risk' in the context of life insurance?
The risk of death during the policy term
ExplanationRisk of death occurring during policy duration.
#25
What is 'adverse selection' in insurance?
The tendency of higher-risk individuals to seek insurance
ExplanationOccurrence where higher-risk individuals seek insurance coverage.