#1
What is insurance fraud?
An intentional deception or misrepresentation made by an individual or entity to obtain money from an insurance company
ExplanationDeceptive actions to gain money from insurers.
#2
In insurance terminology, what does the acronym 'ACV' stand for?
Actual Cash Value
ExplanationThe real market value of insured property.
#3
In insurance, what does the term 'deductible' refer to?
The amount an insured person pays out of pocket before the insurance coverage kicks in
ExplanationInitial out-of-pocket amount before insurance coverage starts.
#4
Which of the following is a common type of insurance fraud?
Staged accidents
ExplanationPlanned incidents to fake insurance claims.
#5
What is redlining in the context of insurance fraud?
A discriminatory practice where insurers refuse coverage or charge more based on characteristics associated with a particular area
ExplanationDiscriminatory denial or pricing based on location.
#6
What is the 'exclusion' clause in insurance policies?
A clause that excludes coverage for specific risks or conditions mentioned in the policy
ExplanationPolicy provision excluding coverage for specified risks or conditions.
#7
What is 'subrogation' in the context of insurance?
The legal right of an insurer to pursue a third party that caused a loss to the insured
ExplanationInsurer's right to go after responsible third parties.
#8
What is 'fronting' in the context of insurance?
A type of insurance fraud involving fake policies
ExplanationFraudulent creation of false insurance policies.
#9
What is 'underwriting' in the insurance industry?
The process of evaluating the risk and deciding whether to provide coverage
ExplanationRisk assessment and decision-making in offering coverage.
#10
What role do insurance investigators play in combating fraud?
Investigating suspicious claims and identifying fraudulent activities
ExplanationProbing claims to uncover fraud and identify wrongdoing.
#11
What are some preventive measures insurance companies can take to combat fraud?
Implementing fraud detection technology
ExplanationUsing technology to prevent and detect fraudulent activities.
#12
What is a 'moral hazard' in the context of insurance?
A situation where the insured intentionally creates or worsens a loss
ExplanationIntentional actions by the insured leading to losses.
#13
What is 'coinsurance' in insurance policies?
A clause that allows the insured to share the cost of covered services with the insurer
ExplanationShared cost arrangement between insured and insurer.
#14
What is 'rescission' in the context of insurance contracts?
The cancellation of an insurance policy retroactively
ExplanationRetroactive cancellation of insurance policies.
#15
What is 'reinsurance' in the insurance industry?
Insurance purchased by insurance companies to limit their risk exposure
ExplanationInsurance for insurers to manage risk exposure.