Fundamentals Of Insurance BC Test
Questions And Correct Answers
What is the major function of insurance?
to allow the spread of risk
What are the five important functions of insurance?
1) insurance is the shifting of financial responsibility for a loss
2) payment will be made only in the event of an insured risk
3) the amount of payment is restricted to the amount required to indemnify the insured
4) insurance covers losses the object may be exposed to
5) the indemnity can be in the form of money or repair/replacement
What are the three main types of insurance included in broad insurance (property and
casualty)
Auto insurance
property insurance
liability insurance
(Also known as general insurance)
, Identify the two major types of insurers
1) private insurers
2)government insurers
define how stock companies work compared to mutual companies
Stock companies exist to turn a profit
Mutual companies exist to provide lower insurance rates for its policy holders
What type of insurance involves government insurers
Mandatory auto insurance, such as ICBC
identify the two methods of distributing insurance and how the differentiate
Direct Writing System
-represent products provided by one company exclusively
Independent brokerage
-represent more than one insurance company
Chapter 2
Questions And Correct Answers
What is the major function of insurance?
to allow the spread of risk
What are the five important functions of insurance?
1) insurance is the shifting of financial responsibility for a loss
2) payment will be made only in the event of an insured risk
3) the amount of payment is restricted to the amount required to indemnify the insured
4) insurance covers losses the object may be exposed to
5) the indemnity can be in the form of money or repair/replacement
What are the three main types of insurance included in broad insurance (property and
casualty)
Auto insurance
property insurance
liability insurance
(Also known as general insurance)
, Identify the two major types of insurers
1) private insurers
2)government insurers
define how stock companies work compared to mutual companies
Stock companies exist to turn a profit
Mutual companies exist to provide lower insurance rates for its policy holders
What type of insurance involves government insurers
Mandatory auto insurance, such as ICBC
identify the two methods of distributing insurance and how the differentiate
Direct Writing System
-represent products provided by one company exclusively
Independent brokerage
-represent more than one insurance company
Chapter 2
