#1
Which principle of insurance ensures that the insured should not gain from an insurance policy?
Principle of Utmost Good Faith
Principle of Insurable Interest
Principle of Indemnity
Principle of Contribution
#2
Which type of contract is insurance considered to be?
Unilateral contract
Bilateral contract
Conditional contract
Void contract
#3
What is 'moral hazard' in insurance?
The risk that the insured will intentionally cause a loss to claim insurance benefits
The risk that the insured will forget to renew their policy
The risk that the insurer will deny a valid claim
The risk that the insured will be involved in an accident
#4
In insurance terminology, what does 'endorsement' refer to?
A document proving insurance coverage
An amendment or modification to an insurance policy
The process of verifying policyholder information
The payment made by the insured to the insurer
#5
What does 'deductible' mean in an insurance policy?
The amount the insured pays out-of-pocket before the insurer covers the remaining costs
The total amount of coverage provided by the insurer
The premium paid by the insured
The amount the insurer pays for a covered loss
#6
In insurance, what is 'actual cash value' (ACV)?
The amount an insured is entitled to receive after depreciation
The amount an insured pays for a policy
The market value of an insured item at the time of loss
The maximum coverage limit of an insurance policy
#7
What is the purpose of 'insurable interest' in insurance?
To ensure that the insurance policy covers all possible risks
To prevent fraudulent claims by the insured
To ensure that the insured has a financial stake in the insured property or person
To determine the premium amount for the insurance policy
#8
What does the term 'subrogation' mean in insurance?
The insured can transfer their policy to another person
The insurer can recover costs from third parties after paying a claim
The insured can cancel the policy at any time
The insurer cannot deny a claim once accepted
#9
What is a 'rider' in an insurance policy?
A person who assesses the risk for the insurance company
A clause added to a policy to provide additional coverage
A document detailing the terms of the insurance contract
A type of insurance specifically for motorcyclists
#10
What does the term 'underwriting' mean in insurance?
The process of investigating and evaluating risks
The process of renewing an insurance policy
The process of filing a claim
The process of calculating premiums
#11
What is the main purpose of reinsurance?
To provide coverage for high-risk individuals
To transfer risk from the primary insurer to another insurer
To reduce the number of claims filed by policyholders
To increase the premiums charged to policyholders
#12
What is 'co-insurance' in health insurance?
A type of insurance for multiple individuals
A provision that requires the insured to share a percentage of costs with the insurer
An insurance policy that covers multiple risks
An agreement between multiple insurers to share the risk of a policy
#13
What does 'fiduciary responsibility' mean in insurance?
The responsibility of the insured to act in the best interest of the insurer
The responsibility of the insurer to act in the best interest of the insured
The responsibility of insurance agents to disclose all policy terms to the insured
The responsibility of insurance companies to invest policyholder premiums prudently
#14
What is 'underinsured motorist coverage' in auto insurance?
Coverage that protects the insured if the other driver is uninsured
Coverage that pays for damages caused by the insured driver
Coverage that pays for damages exceeding the other driver's insurance limits
Coverage that pays for medical expenses of the insured driver
#15
Under which principle of insurance, both the insurer and insured are required to disclose all material facts before entering into a contract?
Principle of Utmost Good Faith
Principle of Insurable Interest
Principle of Indemnity
Principle of Contribution
#16
Which of the following is NOT a type of insurance commonly used in business?
Property insurance
Liability insurance
Human insurance
Business interruption insurance
#17
In insurance, what is 'exclusion'?
A condition that restricts coverage under the policy
An additional coverage option for policyholders
A clause that allows the insured to cancel the policy
A type of insurance policy specifically for high-risk individuals
#18
What is 'concurrent causation' in property insurance?
A situation where two or more perils contribute to a single loss
A clause that allows the insurer to cancel the policy at any time
A provision that requires the insured to disclose all material facts
A condition that restricts coverage under the policy
#19
What is 'tort' in insurance law?
A legal term referring to a wrongful act that results in harm
A type of insurance policy for property damage
A clause in an insurance policy excluding certain risks
A provision that allows the insurer to terminate the policy