Insurance Basics! Ultimate Trivia Quiz
(89).jpg "Insurance Basics! Ultimate Trivia Quiz - Quiz")
Do you know the basics of insurance? Do you suppose you can pass this test? Insurance is a means of safeguard from a monetary deficit. Insurance is a type of risk management mainly used to deter against the risk of a contingent or uncertain loss. It is also useful to know that almost anything can be insured. Take this quiz and see how much you know about the basics of insurance.
- 1.Which of the following terms is most closely related to the concept of insurable interest?
- A.
Loss valuation
- B.
Actual cash value
- C.
Indemnity
- D.
Replacement cost
- 2.Replacement cost minus depreciation best describes which of the following?
- A.
Direct loss value
- B.
Actual cash value
- C.
Insurable Interest
- D.
Financial risk
- 3.All of the following are required as elements of a legal contract except:
- A.
Consideration
- B.
Competent parties
- C.
Agreement
- D.
Countersignature
- 4.An answer to an insurance question on an application that is guaranteed to be true best defines:
- A.
Representations
- B.
Misrepresentations
- C.
Warranties
- D.
Concealments
- 5.Which of the following statements is true regarding binders?
- A.
A binder is not usually valid for more than 90 days
- B.
A binder may be oral or written
- C.
A binder may be canceled by the insured within 2 days
- D.
Binders are valid for 15 days after the policy is issued
- 6.In order to broaden or amend coverage in property and casualty policies, which of the following is used:
- A.
Binders
- B.
Amendments
- C.
Endorsements
- D.
Conditions
- 7.If an insured decides to stop paying premiums on his or her policy and returns the contract to the insurer mid-term, the insured would receive which of the following premium refunds?
- A.
Short rate
- B.
Pro-rate
- C.
Actual cash value
- D.
Specified peril
- 8.An insured purchases a fire policy for $150,000 and takes a policy with an 80% co-insurance clause. The building is worth $250,000. The insured has a kitchen fire and the damages are $30,000 and he carries a $500 deductible. What will the insurer pay?
- A.
$18,500
- B.
$28,000
- C.
$22,000
- D.
$22,500
- 9.All of the following are essential elements of negligence except:
- A.
Actual injury
- B.
Legal duty
- C.
Proximate cause
- D.
Criminal act
- 10.Which of the following policies provides open perils coverage?
- A.
HO-2 Policy
- B.
HO-3 Policy
- C.
HO-4 Policy
- D.
HO-6 Policy
- 11.Special limits of liability in a Homeowners contract include all but the following:
- A.
Money and securities
- B.
Jewelry and furs
- C.
Firearms
- D.
Clothing
- 12.Auto insurance premiums for a Personal Auto Policy are based on all of the following except:
- A.
Type and amount of coverage desired
- B.
Individuals who will operate the vehicle
- C.
Where the vehicle is garaged
- D.
Deductible chosen
- E.
Gross total weight of the vehicle
- 13.An insured with auto policy limits of 100/300/50 hits another vehicle injuring two people. They are awarded $15,000 and $90,000. How much will the insured’s automobile policy pay?
- A.
$100,000
- B.
$90,000
- C.
$105,000
- D.
$15,000
- 14.A basic fire policy will pay for all of the following EXCEPT:
- A.
Fire
- B.
Removal
- C.
Lightning
- D.
Explosion
- 15.By entering into an insurance contract, a policyholder transfers the right of legal action against a responsible third party to the insurer. This is known as:
- A.
Coinsurance
- B.
Insurance Interest
- C.
Subrogation
- D.
Abandonment
- 16.After a loss has occurred, an insured has all of the following duties EXCEPT:
- A.
Reimburse the mortgagee for its interests in the damaged property
- B.
Protect the property from further damage
- C.
Separate damaged property from undamaged property
- D.
Immediately provide notice
- 17.Uninsured motorist coverage in an auto policy provides payments to which of the following?
- A.
Bodily injury to the insured
- B.
Bodily injury to the parties at fault
- C.
Physical damage to the auto
- D.
Bodily injury to the uninsured driver
- 18.Lynn has an auto policy with limits of 50/100. She injures two people in an accident and one is left with $25,000 in injuries and the other with $75,000. How much will Lynn’s policy pay?
- A.
$50,000
- B.
$75,000
- C.
$100,000
- D.
$0; the policies of the injured parties provides primary coverage.
- 19.A driver loses control of his auto and damages his next door neighbor’s fence. The damages will be paid by the driver’s:
- A.
Collision
- B.
Comprehensive
- C.
Property Damage Liability
- D.
No coverage applies due to driver negligence.
- 20.Which of the following is excluded from a flood policy?
- A.
Overflow of inland waters
- B.
Surface water run-off
- C.
Sewer backup
- D.
Mudslide
- 21.Henry is sued for negligence and the jury awards the injured party $175,000. Henry’s policy has a limit of up to $100,000 per occurrence. In addition, his insurance carrier is charged $17,000 for defending the suit. How Henry’s his policy pay?
- A.
$100,000
- B.
$117,000
- C.
$125,000
- D.
$175,000
- 22.Which of the following statements regarding medical payments coverage in a personal auto policy is true?
- A.
All reasonable medical expenses are covered up to the policy limit.
- B.
Legal liability need not be proven for payment to be made.
- C.
An insured struck by a vehicle while a pedestrian would be covered.
- D.
A neighbor is assisting you in changing your tire and is injured while loosening the lug nuts.
- E.
All of the above.
- 23.If an insured and insurer disagree as to whether there is coverage under a policy, which of the following would be used to determine a resolution?
- A.
Arbitration
- B.
Appraisal
- C.
Assignment
- D.
Subrogation
- 24.What term best describes a building that does not have any contents and there are no normal activities taking place?
- A.
Absent
- B.
Vacant
- C.
Unoccupied
- D.
None of the above.
- 25.An insurance contract does which of the following?
- A.
Eliminates risk by accumulating funds
- B.
Transfers risk by accumulating funds
- C.
Makes risks predictable by transferring funds
- D.
Eliminates risk by transferring funds
Questions: 25 | Attempts: 22260 | Last updated: Mar 22, 2022
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