NJ P & C EXAM - INSURANCE TERMS AND RELATED CONCEPTS
1. Untrue statements on the application uninten- B. Material misrepresentations
tionally made by the insureds that, if discov-
ered, would alter the underwriting decision of A material misrepresentation is
a state-
the insurance company, are called ment that, if discovered, would alter
A. Common errors the underwriting decision of the
B. Material misrepresentations insurance company.
C. Fraudulent statements
D. Warranties
2. Peril is most easily defined as B. The cause of a loss insured
A. Something that increases the chance against
of loss
B. The cause of loss insured against Perils are the causes of loss
C. An unhealthy attitude about safety insured against in an insurance
D. The chance of a loss occurring policy.
3. Which of the following best describes
negli- gence?
A. The inability to meet the burden of proof
B. The failure to use reasonable and B. The failure to use reasonable
prudent care
and prudent care
C. A situation that creates a probability of
loss Negligence is defined as the failure
D. A latent defect or fault in property to use care that a reasonable,
4. A situation in which a person can only lose prudent person would have in a
or have no change represents similar situa- tion or circumstance.
A. Speculative risk
B. Adverse selection D. Pure risk
C. Hazard
D. Pure risk Pure risk refers to situations that
can only result in a loss or no
change. Pure risk is the only type
insurance compa- nies are willing
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, NJ P & C EXAM - INSURANCE TERMS AND RELATED CONCEPTS
to accept.
5. D. The uncertainty of loss
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1. Untrue statements on the application uninten- B. Material misrepresentations
tionally made by the insureds that, if discov-
ered, would alter the underwriting decision of A material misrepresentation is
a state-
the insurance company, are called ment that, if discovered, would alter
A. Common errors the underwriting decision of the
B. Material misrepresentations insurance company.
C. Fraudulent statements
D. Warranties
2. Peril is most easily defined as B. The cause of a loss insured
A. Something that increases the chance against
of loss
B. The cause of loss insured against Perils are the causes of loss
C. An unhealthy attitude about safety insured against in an insurance
D. The chance of a loss occurring policy.
3. Which of the following best describes
negli- gence?
A. The inability to meet the burden of proof
B. The failure to use reasonable and B. The failure to use reasonable
prudent care
and prudent care
C. A situation that creates a probability of
loss Negligence is defined as the failure
D. A latent defect or fault in property to use care that a reasonable,
4. A situation in which a person can only lose prudent person would have in a
or have no change represents similar situa- tion or circumstance.
A. Speculative risk
B. Adverse selection D. Pure risk
C. Hazard
D. Pure risk Pure risk refers to situations that
can only result in a loss or no
change. Pure risk is the only type
insurance compa- nies are willing
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7
, NJ P & C EXAM - INSURANCE TERMS AND RELATED CONCEPTS
to accept.
5. D. The uncertainty of loss
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7
