Question 1

With cancelable policies, the insurer is responsible under a binder for losses that:

Accepted Answer

A) occur due to pure risk exposures. 
B) the underwriter thinks are insurable. 
C) occur due to idiosyncratic risk exposures. 
D) occur throughout the term of the policy. 
E) occur prior to cancellation. 
A) occur due to pure risk exposures. 
B) the underwriter thinks are insurable. 
C) occur due to idiosyncratic risk exposures. 
D) occur throughout the term of the policy. 
E) occur prior to cancellation.

Question 2

Consequential losses are also known as:

Accepted Answer

A) direct losses. 
B) accidental losses. 
C) extra expense losses. 
D) indirect losses. 
E) punitive losses. 
A) direct losses. 
B) accidental losses. 
C) extra expense losses. 
D) indirect losses. 
E) punitive losses.

Question 3

It is important to understand the nature of such a policy because the insured has to look for what is not covered rather than what is covered.Identify this perils policy.

Accepted Answer

A) Named-perils policy 
B) Open-perils policy 
C) Flexible-perils policy 
D) No risk perils policy 
E) Closed-perils policy 
A) Named-perils policy 
B) Open-perils policy 
C) Flexible-perils policy 
D) No risk perils policy 
E) Closed-perils policy

Question 4

Inherent vice is excluded in insurance coverage.

Accepted Answer

A) True 
 B)False

Question 5

Suspension of an insurance contract negates coverage as long as some condition exists.Once the condition is eliminated, protection reverts after a new agreement between the parties.

Accepted Answer

A) True 
 B)False

Question 6

The 1992 Chicago flood required that Marshall Fields downtown store close its doors for several days while crews worked to clean up damage caused by the flood waters.If Marshall Fields reduced its orders to suppliers of its goods, these suppliers would experience losses caused by the water damage, even though their own property was not damaged.Identify these losses.

Accepted Answer

A) Dependent losses 
B) Contingent business interruption losses 
C) Extra expense losses 
D) Preventative losses 
E) Facultative business interruption losses 
A) Dependent losses 
B) Contingent business interruption losses 
C) Extra expense losses 
D) Preventative losses 
E) Facultative business interruption losses

Question 7

The second major element of an insurance contract, the _____, specifies the perils and exposures covered, or provide some indication of what they might be.

Accepted Answer

The answer of The second major element of an insurance...

Question 8

Which of the following statements is true about exclusions?

Accepted Answer

A) Losses caused intentionally by the insured are not excluded. 
B) Wear and tear is included in insurance coverage. 
C) Exclusions encourage adverse selection and moral hazard. 
D) Losses that are not accidental make prediction difficult. 
E) Naturally occurring losses that are expected are not excluded in insurance coverages. 
A) Losses caused intentionally by the insured are not excluded. 
B) Wear and tear is included in insurance coverage. 
C) Exclusions encourage adverse selection and moral hazard. 
D) Losses that are not accidental make prediction difficult. 
E) Naturally occurring losses that are expected are not excluded in insurance coverages.

Question 9

The earthquake peril requires separate rating and is excluded from homeowners' policies.

Accepted Answer

A) True 
 B)False

Question 10

Some forms of automobile insurance may be written on a continuous basis, with premiums payable at specified intervals, such as every six months.Such policies remain in force:

Accepted Answer

A) as long as there is no dispute between the insurer and the insured. 
B) for a three-month or six-month period, but mostly for a year. 
C) as long as premiums are paid. 
D) for the entire life of the insured. 
E) as long as the insured is insurable. 
A) as long as there is no dispute between the insurer and the insured. 
B) for a three-month or six-month period, but mostly for a year. 
C) as long as premiums are paid. 
D) for the entire life of the insured. 
E) as long as the insured is insurable.

Question 11

If a peril is not listed in the insurance contract, loss resulting from it is not covered.Identify this policy.

Accepted Answer

A) Open-perils policy 
B) Flexible-perils policy 
C) Closed-perils policy 
D) Named-perils policy 
E) All risk perils policy 
A) Open-perils policy 
B) Flexible-perils policy 
C) Closed-perils policy 
D) Named-perils policy 
E) All risk perils policy

Question 12

The 1992 Chicago flood required that Marshall Fields downtown store close its doors for several days while crews worked to clean up damage caused by the flood waters.Identify this loss.

Accepted Answer

A) Business interruption loss 
B) Preventative loss 
C) Accidental loss 
D) Extra expense loss 
E) Punitive loss 
A) Business interruption loss 
B) Preventative loss 
C) Accidental loss 
D) Extra expense loss 
E) Punitive loss

Question 13

Personal injury is the physical injury to a person, including the pain and suffering that may result.

Accepted Answer

A) True 
 B)False

Question 14

The purpose of the _____ clause is to force insureds to perform the way they would if they did not have insurance.

Accepted Answer

The answer of The purpose of the _____ clause is...

With cancelable policies, the insurer is responsible under a binder for losses that:

Consequential losses are also known as:

It is important to understand the nature of such a policy because the insured has to look for what is not covered rather than what is covered.Identify this perils policy.

Inherent vice is excluded in insurance coverage.

Suspension of an insurance contract negates coverage as long as some condition exists.Once the condition is eliminated, protection reverts after a new agreement between the parties.

The second major element of an insurance contract, the _____, specifies the perils and exposures covered, or provide some indication of what they might be.

Which of the following statements is true about exclusions?

The earthquake peril requires separate rating and is excluded from homeowners' policies.

Some forms of automobile insurance may be written on a continuous basis, with premiums payable at specified intervals, such as every six months.Such policies remain in force:

If a peril is not listed in the insurance contract, loss resulting from it is not covered.Identify this policy.

The 1992 Chicago flood required that Marshall Fields downtown store close its doors for several days while crews worked to clean up damage caused by the flood waters.Identify this loss.

Personal injury is the physical injury to a person, including the pain and suffering that may result.

The purpose of the _____ clause is to force insureds to perform the way they would if they did not have insurance.

The Nature of Risk: Losses and Opportunities

Risk Measurement and Metrics

Risk Attitudes: Expected Utility Theory and Demand for Hedging

Evolving Risk Management: Fundamental Tools

The Evolution of Risk Management: Enterprise Risk Management

The Insurance Solution and Institutions

Insurance Operations

Insurance Markets and Regulation

Fundamental Doctrines Affecting Insurance Contracts

Property Risk Management

The Liability Risk Management

Multirisk Management Contracts: Homeowners

Multirisk Management Contracts: Auto

Multirisk Management Contracts: Business

Risks Related to the Job: Workers Compensation and Unemployment Compensation

Life Cycle Financial Risks

Social Security

Mortality Risk Management: Individual Life Insurance and Group Life Insurance

Employment-Based Risk Management General

Employment-Based and Individual Longevity Risk Management

Employment and Individual Health Risk Management

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Exam 10: Structure and Analysis of Insurance Contracts

With cancelable policies, the insurer is responsible under a binder for losses that:

Consequential losses are also known as:

It is important to understand the nature of such a policy because the insured has to look for what is not covered rather than what is covered.Identify this perils policy.

Inherent vice is excluded in insurance coverage.

Suspension of an insurance contract negates coverage as long as some condition exists.Once the condition is eliminated, protection reverts after a new agreement between the parties.

The second major element of an insurance contract, the _____, specifies the perils and exposures covered, or provide some indication of what they might be.

Which of the following statements is true about exclusions?

The earthquake peril requires separate rating and is excluded from homeowners' policies.

Some forms of automobile insurance may be written on a continuous basis, with premiums payable at specified intervals, such as every six months.Such policies remain in force:

If a peril is not listed in the insurance contract, loss resulting from it is not covered.Identify this policy.

The 1992 Chicago flood required that Marshall Fields downtown store close its doors for several days while crews worked to clean up damage caused by the flood waters.Identify this loss.

Personal injury is the physical injury to a person, including the pain and suffering that may result.

The purpose of the _____ clause is to force insureds to perform the way they would if they did not have insurance.

The Nature of Risk: Losses and Opportunities

Risk Measurement and Metrics

Risk Attitudes: Expected Utility Theory and Demand for Hedging

Evolving Risk Management: Fundamental Tools

The Evolution of Risk Management: Enterprise Risk Management

The Insurance Solution and Institutions

Insurance Operations

Insurance Markets and Regulation

Fundamental Doctrines Affecting Insurance Contracts

Property Risk Management

The Liability Risk Management

Multirisk Management Contracts: Homeowners

Multirisk Management Contracts: Auto

Multirisk Management Contracts: Business

Risks Related to the Job: Workers Compensation and Unemployment Compensation

Life Cycle Financial Risks

Social Security

Mortality Risk Management: Individual Life Insurance and Group Life Insurance

Employment-Based Risk Management General

Employment-Based and Individual Longevity Risk Management

Employment and Individual Health Risk Management

Filters