#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 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.
#10
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.
#11
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.
#12
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.
#13
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.
#14
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.