Fundamentals of Insurance Practice Exam-2023. Verified Questions and Correct Answers

1) Your client has made application for “appraisal”. The intent of the appraisal process is to settle the dispute between your client and the insurer regarding a. Amount of the settlement being offered b. Denial of insurance coverage under the policy c. Right of the insured to purchase the salvage after an insured loss d. Premium charged to coverages being provided by the insurer 2) An indifferent attitude towards losses because of the presence of insurance indicates the presence of a. Gross negligence b. Physical hazard c. A material change d. A moral hazard 3) Insurable interest means the a. Interest gained on money in a bank b. Interest payable on a loan c. Personal interest people have in something they expect to inherit d. Financial interest a person has in something of value 4) Every policy of “fire” insurance a. Usually covers fire, smoke, and specified types of explosions b. Is required by law to cover fire, windstorm and lightning c. Covers fire, explosion and windstorm d. Is required by law to cover at least fire, lightning, and specified types of explosions 5) Your client’s insurance policy was cancelled for non-payment of premium. 6 days after the notice of termination waas mailed, your client had a loss a. The loss would not be covered because no premiums had been paid b. The mailing of the notice automatically cancels the policy after 5 days c. The loss is covered because 15 days’ notice must be given by registered mail d. The loss would be covered but only in proportion to the time the policy was in effect 6) Under a policy of “fire” insurance, the insurer must make payment for a loss within a. 75 days after completion of the proof of loss b. 90 days after complketion of the proof of loss c. 60 days after the completion of the proof of loss unless the contract provides for a shorter period d. One year from the date the loss occurred 7) Every property insurance policy describes the method used to pay claims. Normally the insurer will pay the lesser of three amounts in the event of a claim. One factor which does not enter into this calculation is the a. Actual cash value of the property b. Original cost of the property c. Insured’s interest in the property d. Policy limit 8) Your client recently had a burglary. In the documents filed with the insuracne company, she made a claim for a $1200 television set she never had. This is a a. Breach of warranty b. Fraud c. Misrepresentation d. Material change 9) It can be said that the concept of insurance is based on sharing, which is the fundamental principle of a funtioning society. Insurance is an undertaking that a. Spreads the risk of loss among many people b. Obtains financing for a risky capital venture c. Protects oneself against loss due to bankruptcy d. Prevents the happening of certain types of losses