#1
What is the primary purpose of insurance?
To generate profits for insurance companies
To transfer and manage risk
To provide investment opportunities
To control inflation
#2
What is the purpose of a deductible in an insurance policy?
To limit the coverage amount
To discourage small claims
To determine policy exclusions
To calculate the premium
#3
What is the purpose of an insurance underwriter?
To investigate insurance claims
To assess and evaluate risks for insurance coverage
To sell insurance policies to clients
To calculate premium amounts
#4
In property insurance, what is 'actual cash value' (ACV)?
The replacement cost of the insured property
The current market value of the insured property minus depreciation
The total amount of coverage provided by the policy
The amount paid by the insured before coverage begins
#5
What is the purpose of an insurance policy's 'endorsement'?
To cancel the policy
To modify or add coverage to the policy
To increase the premium amount
To assess the insured's risk tolerance
#6
What is the role of an insurance premium?
To cover the insured party's losses
To generate revenue for the government
To determine policy exclusions
To assess the insurer's financial stability
#7
What is subrogation in the context of insurance?
The process of initiating a claim
The transfer of the insured's rights to the insurer
The calculation of insurance premiums
The negotiation of settlement amounts
#8
What does the term 'reinsurance' mean in the insurance industry?
Insuring the same risk with multiple insurers
The process of insuring again with another insurer
Cancellation of an insurance policy
The act of investigating claims
#9
What is the principle of utmost good faith in insurance contracts?
Both parties must act honestly and disclose all relevant information
The insurer must always prioritize its interests over the insured
The insured has the right to conceal information
The insurer has no obligation to investigate claims
#10
What does the term 'exclusion' mean in an insurance policy?
A specified period during which coverage is not provided
A provision removing coverage for certain risks
The process of terminating an insurance contract
A discount applied to the premium
#11
In health insurance, what is a 'copayment'?
The total amount the insured must pay for covered services
A fixed amount the insured pays for each medical service or prescription
The percentage of covered expenses paid by the insured
The waiting period before coverage begins
#12
What is the purpose of an insurance deductible?
To limit the coverage amount
To determine policy exclusions
To discourage small claims
To assess the insurer's financial stability
#13
In insurance, what does the term 'indemnity' refer to?
The compensation for a covered loss
The policyholder's deductible
The maximum coverage limit
The premium payment frequency
#14
What is a 'moral hazard' in the context of insurance?
A situation where the insured intentionally causes a loss
The uncertainty of future events
The assessment of risk by underwriters
The legal process of settling claims
#15
What is 'coinsurance' in property insurance?
Sharing insurance policies among multiple parties
The use of physical coins as collateral
A provision requiring the insured to share a percentage of losses
The process of insuring valuable coins
#16
What is a 'rider' in insurance terminology?
A person who investigates insurance claims
An additional provision added to a policy to modify its terms
A type of insurance policy
A specialized underwriting technique
#17
What is the concept of 'contribution' in insurance?
The act of policyholders contributing to insurance company profits
The sharing of a loss among multiple insurers
The process of adjusting insurance premiums
The calculation of insurance policy values
#18
What is 'risk retention' in risk management and insurance?
The transfer of risk to an insurance company
The process of identifying and analyzing risks
The decision to accept and bear the financial consequences of a risk
The cancellation of an insurance policy
#19
What is 'reinstatement' in insurance terminology?
The process of renewing an insurance policy
The replacement of a lost or damaged insurance policy
The adjustment of insurance premiums
The cancellation of an insurance contract