RMI 4224- Test 1, RMI 4224 test 2, Schriefer Exam 3,Schriefer Exam 3 UPDATED
ACTUAL Questions And Correct Answers
C
Terms in this set (209)
All of the following are true concerning hazard Except: -"Hazard" is synonymous with "peril."
-A hazard is a condition that increases the probability of
loss.
-A hazard is a condition that increases severity of loss.
-"Hazard" is synonymous with "peril."
-Building a home in a remote, arid area increases the
probability of a loss due to wildfires. In this example, the
decision to build in a remote, arid area is the hazard that
leads to a greater probability of loss due to wildfires.
Joe owns a bar on the edge of the FSU campus. Joe is avoidance
concerned about the risk of liability associated with over-
serving patrons with too much alcohol. Joe has several
risk management techniques available to manage this risk.
Joe decides the best way to manage this risk is to sell his
bar to another person. The risk management technique
Joe utilized is known as:
Retention
Avoidance
Transfer
Reduction
An element of a legally-binding contract includes which all the above
of the following?:
Offer and Acceptance
Competent Parties
Legal Purpose
Legal Consideration
All the above
One characteristic of an insurance contract is the "take-it- contract of adhesion
or leave" nature of the contract's contents. That is, the
insurance company drafts all the contract provisions with
little or no input from the potential insured. This
characteristic makes an insurance contract a/an:
Aleatory Contract
Unilateral Contract
Contract of Adhesion
Personal Contract
,Shavon's home is insured for loss under a standard HO-3 Indemnity
policy. She reports the theft of her 5 year-old TV to her
insurance company. Although Shavon paid $1,500 for the
TV five years ago, she was only paid the actual cash value
(ACV) of her TV ($750) by her insurer. What principle of
insurance does this example illustrate?:
Indemnity
Reasonable Expectations
Utmost Good Faith
Waiver
Which of the following statements is/are true? I. only
I. The insurance company's duty to defend is broader than
its duty to pay covered losses.
II. Endorsements always provide additional coverage.
I only.
II only.
Both I and II.
Neither I nor II.
, All of the following are examples of an insurable interest Roger wants to purchase an HO-5 policy to insure against loss to his next-door
EXCEPT: neighbor's home.
-Jane borrowed $25,000 from Chase Bank to buy a new
car. Chase Bank is listed as an additional insured under
Jane's personal auto policy.
-Roger wants to purchase an HO-5 policy to insure
against loss to his next-door neighbor's home.
-Wells Fargo has an insurable interest in Keith's home by
virtue of the $300,000 Keith borrowed from Wells Fargo
in order to purchase this home.
-Heather purchased a 10 year term life insurance policy
on the life of her husband, Steve.
All of the following statements concerning insurance -Most property insurance policies have provisions that allow an insured to
policy provisions are true EXCEPT: abandon damaged property they no longer want to the insurance company.
-Most property insurance policies have provisions that
allow an insured to abandon damaged property they no
longer want to the insurance company.
-Subrogation is the right of the insurance company to
recover indemnity payments made to an insured from the
third party legally responsible for the loss.
-Salvage is damaged or recovered stolen property taken
over by the insurance company; salvage often reduces
the net payment an insurer makes for a loss.
-Since an insurance policy is a personal contract, an
insurance company typically only allows an insured to
transfer ownership of the policy to another party with the
insurer's prior consent/permission.
Tommy has a Personal Auto Policy (PAP) with bodily injury $85,000
limits of $50,000 per person and $100,000 per accident.
Tommy was recently involved in an auto accident causing
the following bodily injuries:
Injuries to Steve = $60,000
Injuries to Barbara = $10,000
Injuries to Valerie = $25,000
What is the total amount of money all three claimants
collectively will receive from Tommy's insurance
company?
$50,000
$85,000
$95,000
$100,000
ACTUAL Questions And Correct Answers
C
Terms in this set (209)
All of the following are true concerning hazard Except: -"Hazard" is synonymous with "peril."
-A hazard is a condition that increases the probability of
loss.
-A hazard is a condition that increases severity of loss.
-"Hazard" is synonymous with "peril."
-Building a home in a remote, arid area increases the
probability of a loss due to wildfires. In this example, the
decision to build in a remote, arid area is the hazard that
leads to a greater probability of loss due to wildfires.
Joe owns a bar on the edge of the FSU campus. Joe is avoidance
concerned about the risk of liability associated with over-
serving patrons with too much alcohol. Joe has several
risk management techniques available to manage this risk.
Joe decides the best way to manage this risk is to sell his
bar to another person. The risk management technique
Joe utilized is known as:
Retention
Avoidance
Transfer
Reduction
An element of a legally-binding contract includes which all the above
of the following?:
Offer and Acceptance
Competent Parties
Legal Purpose
Legal Consideration
All the above
One characteristic of an insurance contract is the "take-it- contract of adhesion
or leave" nature of the contract's contents. That is, the
insurance company drafts all the contract provisions with
little or no input from the potential insured. This
characteristic makes an insurance contract a/an:
Aleatory Contract
Unilateral Contract
Contract of Adhesion
Personal Contract
,Shavon's home is insured for loss under a standard HO-3 Indemnity
policy. She reports the theft of her 5 year-old TV to her
insurance company. Although Shavon paid $1,500 for the
TV five years ago, she was only paid the actual cash value
(ACV) of her TV ($750) by her insurer. What principle of
insurance does this example illustrate?:
Indemnity
Reasonable Expectations
Utmost Good Faith
Waiver
Which of the following statements is/are true? I. only
I. The insurance company's duty to defend is broader than
its duty to pay covered losses.
II. Endorsements always provide additional coverage.
I only.
II only.
Both I and II.
Neither I nor II.
, All of the following are examples of an insurable interest Roger wants to purchase an HO-5 policy to insure against loss to his next-door
EXCEPT: neighbor's home.
-Jane borrowed $25,000 from Chase Bank to buy a new
car. Chase Bank is listed as an additional insured under
Jane's personal auto policy.
-Roger wants to purchase an HO-5 policy to insure
against loss to his next-door neighbor's home.
-Wells Fargo has an insurable interest in Keith's home by
virtue of the $300,000 Keith borrowed from Wells Fargo
in order to purchase this home.
-Heather purchased a 10 year term life insurance policy
on the life of her husband, Steve.
All of the following statements concerning insurance -Most property insurance policies have provisions that allow an insured to
policy provisions are true EXCEPT: abandon damaged property they no longer want to the insurance company.
-Most property insurance policies have provisions that
allow an insured to abandon damaged property they no
longer want to the insurance company.
-Subrogation is the right of the insurance company to
recover indemnity payments made to an insured from the
third party legally responsible for the loss.
-Salvage is damaged or recovered stolen property taken
over by the insurance company; salvage often reduces
the net payment an insurer makes for a loss.
-Since an insurance policy is a personal contract, an
insurance company typically only allows an insured to
transfer ownership of the policy to another party with the
insurer's prior consent/permission.
Tommy has a Personal Auto Policy (PAP) with bodily injury $85,000
limits of $50,000 per person and $100,000 per accident.
Tommy was recently involved in an auto accident causing
the following bodily injuries:
Injuries to Steve = $60,000
Injuries to Barbara = $10,000
Injuries to Valerie = $25,000
What is the total amount of money all three claimants
collectively will receive from Tommy's insurance
company?
$50,000
$85,000
$95,000
$100,000
