Chapter 1 - Principles Of Insurance
6 Questions
| Total Attempts: 9903
This chapter reviews basic principles that provide a foundation for the insurance industry. They range from the concept of risk, to the idea that individuals and businesses can minimize losses by transferring and sharing risks, to the application of the law of large numbers. Various principles also determine why some risks of loss are insurable whereas others are not.
Questions and Answers
- 1.LaTonya purchases a house from John. She borrows $75,000 from First City Bank that, along with her $25,000 down payment, equals the $100,000 purchase price of the home. Who has an insurable interest in this home? Choose all that apply.
- A.
LaTonya
- B.
John
- C.
LaTonya's son, who would like to inherit the home some day
- D.
First City Bank
- 2.Highpoint Industries has an automatic sprinkler system installed in its office building. This is an example of which risk management method?
- A.
Avoidance
- B.
Reduction
- C.
Retention
- D.
Transfer
- 3.Benson Pharmaceutical Company decides not to manufacture a new drug after determining that it has serious potential side effects. This is an example of which risk management method?
- A.
Transfer
- B.
Retention
- C.
Avoidance
- D.
Reduction
- 4.Because she has always been in good health, Donna decides to cancel her health insurance policy. This is an example of which risk management method?
- A.
Retention
- B.
Control
- C.
Avoidance
- D.
Transfer
- 5.The tread on Alan's automobile tires is very thin. This is an example of what type of hazard?
- A.
Physical
- B.
Moral
- C.
Morale
- D.
Obvious
- 6.Which of the following is a hazard as opposed to a peril?
- A.
Fire
- B.
Lightning
- C.
Wet pavement
- D.
Flood
INS 21 -Chapter 1,2,3 QUIZ 1
Questions: 35 | Attempts: 11296 | Last updated: Jan 27, 2016
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Sample QuestionThe Process of making and implementing decisions to handle loss exposure is known as __________
A contract is a legal agreement
between two or more competent parties that promises a certain performance in
exchange for a certain consideration. When an insurance company agrees to pay
for an insured's losses in exchange...
Questions: 7 | Attempts: 8122 | Last updated: Dec 26, 2012
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Sample QuestionWhich of the following is not a requirement for forming a valid contract?
This quizzes you on how well you learned about car insurance!
Questions: 14 | Attempts: 5688 | Last updated: Oct 22, 2020
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Sample QuestionWhat is: Insurance that pays for the cost of injuries to people involved in an accident and protects the insured against financial loss from lawsuits and other legal expenses incurred as a result of an accident. There are two limits: the maximum that will be paid to any one person and the maximum for each accident.
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