Principles & Practices of Insurance Exam | Questions & 100% Correct Answers (Verified) | Latest Update | Grade A+

What forms the basis of most insurance contracts? a) Subrogation b) Contribution c) Prevention of risk d) Indemnity : d) Indemnity Actual cash value is which of the following? a) The original price paid for an item b) The value of the item to the insured c) The current cost of replacing an item with one of the same kind and condition d) All of the above : c) The current cost of replacing an item with one of the same kind and condition Who is the first party of an insurance contract? 2 | P a g e a) Insured b) Insurer c) Claimant d) None of the above : a) Insured Which of the following is NOT an insurable risk? a) The loss of capital due to the failure of the insured's business b) The loss of business profits while a business is closed for reconstruction after a fire c) A loss arising out of damage to a stranger's property because of an insured's careless conduct. d) A and C above : a) The loss of capital due to the failure of the insured's busines