#1
What is the primary function of an insurance contract?
To provide financial protection against losses
ExplanationFinancial protection against losses
#2
What does the term 'insurable interest' mean in insurance law?
The financial stake an individual has in the subject matter of the insurance policy
ExplanationFinancial stake in insured subject matter
#3
What is the 'exclusion' clause in an insurance policy?
A clause that limits coverage to certain perils
ExplanationLimits coverage to certain perils
#4
What does 'coinsurance' mean in insurance?
The requirement for the insured to maintain coverage up to a specified percentage of the property's value
ExplanationRequirement to maintain coverage up to specified percentage
#5
What is 'rescission' in the context of insurance?
The termination of an insurance policy before its expiration date
ExplanationTermination of policy before expiration date
#6
In insurance, what does the term 'underwriting' refer to?
Assessing risk and deciding whether to accept or reject an insurance application
ExplanationAssessing risk and determining application acceptance
#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
ExplanationInsurer's right to recover payments from third party
#8
In insurance, what is the purpose of the 'declaration' in a policy?
To provide information about the insured and the property or risk being insured
ExplanationProviding information about insured and property
#9
What is the 'waiting period' in insurance policies?
The time an insured must wait before filing a claim
ExplanationTime insured must wait before filing claim
#10
In insurance law, what does 'cancellation' refer to?
The termination of an insurance policy before its expiration date
ExplanationTermination of policy before expiration date
#11
What is the 'deductible' in an insurance policy?
The amount the insured pays out of pocket before the insurer covers the remaining loss
ExplanationAmount insured pays before insurer covers remaining loss
#12
In insurance, what is 'loss mitigation'?
Efforts to minimize or prevent losses before or after they occur
ExplanationEfforts to minimize or prevent losses
#13
Which principle states that an insured should not profit from a loss?
Principle of indemnity
ExplanationInsured should not profit from loss
#14
What is the concept of 'contribution' in insurance law?
The sharing of loss among multiple insurers covering the same risk
ExplanationSharing of loss among multiple insurers
#15
Which principle emphasizes the need for complete and honest disclosure by the insured?
Principle of utmost good faith
ExplanationEmphasizes complete and honest disclosure
#16
What is the purpose of a 'rider' or 'endorsement' in an insurance policy?
To add or modify coverage in the policy
ExplanationAdding or modifying coverage in policy
#17
Which principle allows an insured to recover more than the actual loss suffered?
Principle of contribution
ExplanationAllows insured to recover more than actual loss
#18
What is the 'reinstatement' of an insurance policy?
The renewal of an expired policy without a lapse in coverage
ExplanationRenewal of expired policy without lapse in coverage
#19
Which principle ensures that the insured cannot recover more than the actual loss?
Principle of indemnity
ExplanationEnsures insured cannot recover more than actual loss