#1
What is the primary function of an insurance contract?
To provide financial protection against losses
To generate profit for the insurance company
To regulate insurance markets
To promote competition among insurers
#2
What does the term 'insurable interest' mean in insurance law?
The insured's obligation to disclose all relevant information to the insurer
The financial stake an individual has in the subject matter of the insurance policy
The period during which the insurance policy is in force
The maximum amount an insurer will pay for a covered loss
#3
What is the 'exclusion' clause in an insurance policy?
A clause that limits coverage to certain perils
A clause that voids the entire policy
A clause that increases the premium
A clause that requires additional documentation for claims
#4
What does 'coinsurance' mean in insurance?
The sharing of loss among multiple insured parties
The payment made by the insured to the insurer
The requirement for the insured to maintain coverage up to a specified percentage of the property's value
The automatic renewal of insurance policies
#5
What is 'rescission' in the context of insurance?
The renewal of an expired policy without a lapse in coverage
The cancellation of an insurance policy
The termination of an insurance policy before its expiration date
The modification of coverage during the policy term
#6
In insurance, what does the term 'underwriting' refer to?
Calculating premiums
Assessing risk and deciding whether to accept or reject an insurance application
Handling claims processing
Marketing and selling insurance policies
#7
What is 'subrogation' in the context of insurance law?
The right of an insurer to recover payments from a third party responsible for the loss
The process of calculating the sum insured
The automatic renewal of insurance policies
The exclusion of certain risks from coverage
#8
In insurance, what is the purpose of the 'declaration' in a policy?
To specify the amount of coverage provided by the policy
To define the perils covered by the policy
To outline the responsibilities of the insured
To provide information about the insured and the property or risk being insured
#9
What is the 'waiting period' in insurance policies?
The time an insured must wait before filing a claim
The time an insurer has to process a claim
The period during which coverage is temporarily suspended
The time an insurer waits before issuing a policy
#10
In insurance law, what does 'cancellation' refer to?
The termination of an insurance policy before its expiration date
The process of calculating the sum insured
The reduction of coverage provided by the policy
The adjustment of premiums based on the insured's claims history
#11
What is the 'deductible' in an insurance policy?
The amount the insured pays out of pocket before the insurer covers the remaining loss
The maximum amount an insurer will pay for a covered loss
The period during which the insurance policy is in force
The adjustment of premiums based on the insured's claims history
#12
In insurance, what is 'loss mitigation'?
The process of reducing the amount of coverage in a policy
Efforts to minimize or prevent losses before or after they occur
The payment made by the insured to the insurer
The renewal of an expired policy without a lapse in coverage
#13
Which principle states that an insured should not profit from a loss?
Principle of indemnity
Principle of insurable interest
Principle of utmost good faith
Principle of subrogation
#14
What is the concept of 'contribution' in insurance law?
The process of combining multiple policies to cover a single risk
The sharing of loss among multiple insurers covering the same risk
The payment made by the insured to the insurer
The adjustment of premiums based on the insured's claims history
#15
Which principle emphasizes the need for complete and honest disclosure by the insured?
Principle of indemnity
Principle of insurable interest
Principle of utmost good faith
Principle of subrogation
#16
What is the purpose of a 'rider' or 'endorsement' in an insurance policy?
To decrease the coverage provided by the policy
To add or modify coverage in the policy
To extend the waiting period
To exclude specific perils from coverage
#17
Which principle allows an insured to recover more than the actual loss suffered?
Principle of indemnity
Principle of insurable interest
Principle of subrogation
Principle of contribution
#18
What is the 'reinstatement' of an insurance policy?
The renewal of an expired policy without a lapse in coverage
The modification of coverage during the policy term
The cancellation of an insurance policy
The transfer of a policy to another insured
#19
Which principle ensures that the insured cannot recover more than the actual loss?
Principle of indemnity
Principle of insurable interest
Principle of subrogation
Principle of contribution