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35 Cards in this Set
- Front
- Back
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Materiality is determined by the disadvantage placed on the other party and:
not by the event neither are correct both are correct the influence of the facts |
not by the event influence of the facts |
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Examples of tort law include all of the following EXCEPT:
Breach of contract Bodily injury Libel and slander Personal injury |
Breach of Contract |
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A peril is: anything that increases the chance of loss or severity of loss. pure and speculative. a possibility of a loss. the actual cause of the loss. |
the actual cause of the loss |
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Which of the following is an example of an adverse underwriting decision?
Rejecting the risk Issuing with limitations Charging a higher rate All of these are examples |
All of these are examples |
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Which of the following is not a class of insurance? Casualty Marine Auto Fire |
Casualty |
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Loss control refers to:
preventing a loss from becoming catastrophic. taking measures to prevent further damage during a loss. a combination of risk control techniques with risk financing techniques. taking the necessary precautions that will reduce the risk of a loss. |
taking the necessary precautions that will reduce the risk of a loss.
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The term loss exposure refers to: the increase in the possibility of a loss. the uncertainty of a loss occurring. the actual cause of the loss. the possibility of a loss. |
the possibility of a loss. |
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When an insured rejects uninsured motorist in writing this is considered: a rescission a modification a waiver an example of estoppel |
a waiver |
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The process of reviewing applications for insurance and the information on the application is: Application Evaluation Field Underwriting Underwriting the job of the agent before accepting or rejecting an application |
underwriting |
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Which of the following elements of a contract is/are the binding force? Legal Purpose Competent Parties Offer & Acceptance Consideration |
Consideration |
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The state of being subject to a loss is considered: risk hazard insurance exposure |
exposure |
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Punishment for twisting or misrepresentation would be: up to $25,000 up to 1 year in jail both are correct neither are correct |
both are correct |
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Type of loss exposure pertaining to land and structures attached to it is: personal loss exposure financial loss exposure property loss exposure liability loss exposure |
property loss exposure |
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A hazard that deals with a persons mental attitude, behavior and habits is an example of: Physical hazard Legal hazard Moral hazard Morale hazard |
Moral hazard |
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When a right or privilege has been given up, a party cannot reassert that right or privilege. The process of preventing the party from reasserting that right or privilege is known as: Estoppel Pro-rata Waiver Indemnity |
Estoppel |
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The degree of loss a person/organization faces from suits brought by a third party refers to: Property Exposure Loss Exposure Liability Loss Exposure Human Personnel Loss Exposure |
Liability Loss Exposure |
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According to the California insurance law, either party may rescind a contract for any of the following reasons EXCEPT: Once a contract is signed, it can never be rescinded. One party intentionally or unintentionally hides material information. One party intentionally omits information from the other party. If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract. |
Once a contract is signed, it can never be rescinded. |
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The law of large numbers is a principal that basically says: the larger the amount of information gathered, the more reliable that information will be. the larger the possibility of a loss, the greater the exposure. the larger the number of people in an insurance company, the more stable it is. the more insurance you have, the more protected you are. |
the larger the amount of information gathered, the more reliable that information will be. |
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Which of the following is NOT a known private insurer? Mutual Insurance Companies Reciprocal Insurance Exchanges Stock Insurance Companies Bond Insurance Companies |
Bond Insurance Companies |
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Restoring the insured back to the condition he or she was in before the loss occurred is known as: Insurable Interest Loss Retention Indemnification Restoration |
Indemnification |
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What are the two types of torts? Pure & Speculative Legal & Non-Legal Broad & Basic Intentional & Unintentional |
Intentional & Unintentional |
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Insurance is a contract whereby one undertakes to indemnify another against: Physical hazard Damage Uncertainty Exposure |
Damage |
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The uncertainty or chance of a loss occurring is known as: pure risk. speculative risk. risk management. risk. |
risk |
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A beautician stating that this conditioner fixes badly damaged hair is a: representation stated fact expressed warranty implied warranty |
implied warranty |
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Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain. Theft Misrepresentation Concealment |
Fraud |
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Substitution of a small certain loss for a large uncertain loss is: insurance law of large number san insurable event a pure risk |
insurance |
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Performance depends upon an uncertain future event is the feature: conditional adhesion aleatory unilateral |
aleatory |
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Which of the following are the main types of risks? Avoidance and Retention Speculative and pure Pure and Transfer Sharing and Transfer |
Speculative and pure |
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Any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest or create a liability against him/her, may be insured against. The more unpredictable a loss becomes: the less it becomes insurable interest. the less insurable it becomes. the more it becomes insurable interest. the more insurable it becomes. |
the more insurable it becomes |
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Which of the following is defined as `an agreement between two or more parties enforceable by law?` Insurance Policy Agreement Clause Contract Tort |
Contract |
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Which of the following is the amount of money the insured pays before the insurer pays for the rest of the claim? Subrogation Coinsurance Premium Deductible |
Deductible |
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Which of the following is NOT required for a risk to be ideally insurable? The loss must occur on the insured`s property. The loss must create economic hardship. The loss must be an accident. The loss must be definite and measurable. |
The loss must occur in the insured's property. |
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Which of the following statements is true about reinsurance? Reinsurance is when the insured allows a policy to lapse for nonpayment. Later, if the insured makes the payment, the policy is reinsured. Property and casualty insurers use reinsurance, life insurers do not. When an insurer obtains reinsurance, it has sold the contract to another insurer, and no longer has direct responsibility for the policy. Reinsurance is the process whereby the insurer transfers all or part of the risk to another company. |
Reinsurance is the process whereby the insurer transfers all or part of the risk to another company. |
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A hazard is best defined as: anything that increases the chance of loss or severity of loss due to a peril. risk shifted from one to another. any action from a court that increases the likelihood or size of a loss. a possibility of a loss. |
anything that increases the chance of loss or severity of loss due to a peril. |
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Bob is thinking about obtaining insurance because he just found out he needs extensive surgery that will require several days in the hospital. This situation of waiting until the last minute to obtain insurance is known as: Ideally Insurable Risk Spread of Risk Cost Effective Insurance Adverse Selection |
Adverse Selection |
