QUESTION Which situation is NOT insurable? A) Rita wants to be sure to insure her new riverside cottage from flood damage. B) Trevor wants to purchase hurricane insurance to cover the spectacular ocean view he has from his new home. C) Chad wants to be sure his cattle barns in Kansas are covered in the […]
Date: September 3rd, 2020
QUESTION Which situation is insurable? A) Eileen wants to insure her sister’s house against termite damage. B) Billy wants to help his father by holding the workers’ accident insurance for his father’s steel working company. C) Robert wants to take out a policy to protect his nephew’s store from theft. D) Maxine wants to insure […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT an insurer’s requirement for coverage? A) The policyholder must have an insurable interest. B) The loss should be accidental. C) The loss should be very great. D) The insurer is able to spread the risk widely. E) The loss must be measurable. ANSWER Answer: C Explanation: C) […]
Date: September 3rd, 2020
QUESTION Which of the following is an uninsurable risk? A) theft B) homicide C) tornados D) wildfires E) wear and tear ANSWER Answer: E Explanation: E) Personal risks, market risks, and political risks are uninsurable risks. Other uninsurable risks are wars, recessions, strikes, and gradual rusting or wear and tear.
Date: September 3rd, 2020
QUESTION Which of the following is an insurable risk? A) a tsunami B) being fired or laid off C) business competition undercutting you on price D) a regime change in the Middle East E) a war in Africa ANSWER Answer: A Explanation: A) A tsunami is an insurable risk because it meets the insurer’s […]
Date: September 3rd, 2020
QUESTION Which insurance term is correctly paired with its definition? A) premium: a notice by the insured to the insurer that payment is expected to cover a loss B) reserves: the specified amount that a policyholder must pay toward a loss before the insurer will pay anything C) deductible: funds received from premiums and left […]
Date: September 3rd, 2020
QUESTION Which of the following is an example of speculative risk? A) Miguel runs a nursery and sells starter plants in the spring. He has insurance against loss of inventory due to a late spring frost. B) Penelope works as a book editor from her home office. She has insured her office equipment against fire […]
Date: September 3rd, 2020
QUESTION Who is most likely to pay the least for life insurance? A) firemen B) journalists C) loggers D) farmers E) roofers ANSWER Answer: B Explanation: B) Firemen, loggers, farmers, and roofers all experience high fatality rates. Workers in the information industry suffer few fatal work injuries.
Date: September 3rd, 2020
QUESTION Which of the following involves speculative risk? A) boycotts B) hurricanes C) arson D) lightning strikes E) new products ANSWER Answer: E Explanation: E) Speculative risk involves a chance of either gain or loss. This is the kind of risk that a company takes when it introduces a new product, which may make […]
Date: September 3rd, 2020
QUESTION Which insurance principle is correctly paired with its definition? A) principle of economically feasible premium: the principle that states that insurers will not pay the insured more in damage claims than the dollar loss actually sustained B) principle of indemnity: the principle that groups that are more apt to need insurance are also those […]
Date: September 3rd, 2020
