Question 1

Modification of an existing insurance contract is usually accomplished by means of a(n) :

Accepted Answer

A)   endorsement
B)   modifier
C)   rider
D)   A or B only
E)   A or C only

Question 2

Mold is generally not covered under the majority of insurance policies.

Accepted Answer

A) True 
 B)False

Question 3

An insurance broker typically works for a single insurance company.

Accepted Answer

A) True 
 B)False

Question 4

The insurable interest in a piece of property must exist at the time of loss.

Accepted Answer

A) True 
 B)False

Question 5

In automobile insurance,comprehensive coverage refers to a policy that covers all types of losses related to the ownership and operation of an automobile.

Accepted Answer

A) True 
 B)False

Question 6

An omnibus clause under an automobile liability policy covers other drivers of the insured's automobile.

Accepted Answer

A) True 
 B)False  True

Question 7

What are the advantages and disadvantages of no-fault automobile insurance? What is the purpose of no-fault coverage? Should no-fault coverage be mandatory,optional,or not offered? Give reasons for your answer.

Accepted Answer

No-fault insurance reduces litigation costs,which theoretically saves money for the policyholder.It also should result in faster payment of claims.Opponents of no-fault say that it removes incentives to drive carefully and does not hold persons responsible for the consequences of their behavior.

Question 8

Fred has an automobile liability insurance policy of $100,000 and an umbrella policy with $1 million dollars in coverage.Fred is driving negligently and crashes into Barney's car.Barney suffers $500,000 in damages.How will the policies pay for the damages?

Accepted Answer

A)   The $500,000 will be paid directly from the umbrella policy.
B)   The first $100,000 will be paid from the automobile liability policy,and the remaining $400,000 will be paid from the umbrella policy.
C)   Barney will receive the $100,000 from the automobile liability policy,but nothing from the umbrella policy.
D)   Barney will receive $50,000 from the automobile liability policy and $450,000 from the umbrella policy.

Question 9

The requirement that an insured would suffer a loss in the absence of insurance if the insured property is damaged or destroyed is the requirement of:

Accepted Answer

A)   indemnification
B)   reinsurance
C)   insurable interest
D)   beneficiary interest
E)   coinsurance

Question 10

What is the usual effect of a double indemnity clause?

Accepted Answer

A)   It provides that a single life insurance policy covers the lives of two people,typically a husband and wife.
B)   It provides that the standard premiums purchase twice the amount of insurance coverage as they usually do.
C)   It provides that the policy will pay twice the policy amount if death occurs within the first 10 years that the policy is in effect.
D)   It provides that the policy will pay twice the policy amount if death is caused by an accident.

Question 11

Collision insurance pays for damages caused if an automobile owner's car is struck by another car.

Accepted Answer

A) True 
 B)False

Question 12

The type of auto insurance coverage that pays for the damage caused by the insured to the car of the other driver in an accident is:

Accepted Answer

A)   collision
B)   comprehensive
C)   liability
D)   medical payments
E)   no fault

Question 13

State insurance laws generally provide that insurance must be sold through a broker or agent.

Accepted Answer

A) True 
 B)False

Question 14

An insurance agent is the agent of the insurance company.

Accepted Answer

A) True 
 B)False  True

Question 15

An insurance deductible clause usually states that insurance proceeds are payable only after the insured has paid a specified amount of the damage or losses.

Accepted Answer

A) True 
 B)False

Question 16

Under the collision coverage of an automobile insurance policy,loss to the insured automobile is covered even in an accident that is the fault of the insured.

Accepted Answer

A) True 
 B)False

Question 17

Most fire insurance policies are issued using the Delaware standard fire insurance policy form.

Accepted Answer

A) True 
 B)False

Question 18

An insurance broker is the agent of the insurance company.

Accepted Answer

A) True 
 B)False

Question 19

If a car insurance policy provides that it will pay the medical expenses of other drivers who are injured through the actions of the insured,the coverage is:

Accepted Answer

A)   collision
B)   comprehensive
C)   liability
D)   medical payments
E)   no fault

Question 20

Which of the following is true about no-fault auto insurance?

Accepted Answer

A)   It means that if there is no fault on the part of the insured,there will be no payment by the insured's insurer.
B)   A driver's insurer pays for the injuries to that driver regardless of who is at fault in the accident.
C)   No-fault insurance is broad,usually providing coverage for lost wages,pain and suffering,and punitive damages.
D)   No-fault insurance is lower cost coverage available only to good drivers who have never been at fault in an accident.

Exam 50: Insurance

Modification of an existing insurance contract is usually accomplished by means of a(n) :

Correct Answer
verified

Mold is generally not covered under the majority of insurance policies.

Correct Answer
verified

An insurance broker typically works for a single insurance company.

Correct Answer
verified

The insurable interest in a piece of property must exist at the time of loss.

Correct Answer
verified

In automobile insurance,comprehensive coverage refers to a policy that covers all types of losses related to the ownership and operation of an automobile.

Correct Answer
verified

An omnibus clause under an automobile liability policy covers other drivers of the insured's automobile.

Correct Answer
verified
True

What are the advantages and disadvantages of no-fault automobile insurance? What is the purpose of no-fault coverage? Should no-fault coverage be mandatory,optional,or not offered? Give reasons for your answer.

Fred has an automobile liability insurance policy of $100,000 and an umbrella policy with $1 million dollars in coverage.Fred is driving negligently and crashes into Barney's car.Barney suffers $500,000 in damages.How will the policies pay for the damages?

Correct Answer
verified

The requirement that an insured would suffer a loss in the absence of insurance if the insured property is damaged or destroyed is the requirement of:

Correct Answer
verified

What is the usual effect of a double indemnity clause?

Correct Answer
verified

Collision insurance pays for damages caused if an automobile owner's car is struck by another car.

Correct Answer
verified

The type of auto insurance coverage that pays for the damage caused by the insured to the car of the other driver in an accident is:

Correct Answer
verified

State insurance laws generally provide that insurance must be sold through a broker or agent.

Correct Answer
verified

An insurance agent is the agent of the insurance company.

Correct Answer
verified
True

An insurance deductible clause usually states that insurance proceeds are payable only after the insured has paid a specified amount of the damage or losses.

Correct Answer
verified

Under the collision coverage of an automobile insurance policy,loss to the insured automobile is covered even in an accident that is the fault of the insured.

Correct Answer
verified

Most fire insurance policies are issued using the Delaware standard fire insurance policy form.

Correct Answer
verified

An insurance broker is the agent of the insurance company.

Correct Answer
verified

If a car insurance policy provides that it will pay the medical expenses of other drivers who are injured through the actions of the insured,the coverage is:

Correct Answer
verified

Which of the following is true about no-fault auto insurance?

Correct Answer
verified

Exam 50: Insurance

Modification of an existing insurance contract is usually accomplished by means of a(n) :

Correct AnswerverifiedShow Answer

Mold is generally not covered under the majority of insurance policies.

Correct AnswerverifiedShow Answer

An insurance broker typically works for a single insurance company.

Correct AnswerverifiedShow Answer

The insurable interest in a piece of property must exist at the time of loss.

Correct AnswerverifiedShow Answer

In automobile insurance,comprehensive coverage refers to a policy that covers all types of losses related to the ownership and operation of an automobile.

Correct AnswerverifiedShow Answer

An omnibus clause under an automobile liability policy covers other drivers of the insured's automobile.

Correct AnswerverifiedTrue

What are the advantages and disadvantages of no-fault automobile insurance? What is the purpose of no-fault coverage? Should no-fault coverage be mandatory,optional,or not offered? Give reasons for your answer.

Fred has an automobile liability insurance policy of $100,000 and an umbrella policy with $1 million dollars in coverage.Fred is driving negligently and crashes into Barney's car.Barney suffers $500,000 in damages.How will the policies pay for the damages?

Correct AnswerverifiedShow Answer

The requirement that an insured would suffer a loss in the absence of insurance if the insured property is damaged or destroyed is the requirement of:

Correct AnswerverifiedShow Answer

What is the usual effect of a double indemnity clause?

Correct AnswerverifiedShow Answer

Collision insurance pays for damages caused if an automobile owner's car is struck by another car.

Correct AnswerverifiedShow Answer

The type of auto insurance coverage that pays for the damage caused by the insured to the car of the other driver in an accident is:

Correct AnswerverifiedShow Answer

State insurance laws generally provide that insurance must be sold through a broker or agent.

Correct AnswerverifiedShow Answer

An insurance agent is the agent of the insurance company.

Correct AnswerverifiedTrue

An insurance deductible clause usually states that insurance proceeds are payable only after the insured has paid a specified amount of the damage or losses.

Correct AnswerverifiedShow Answer

Under the collision coverage of an automobile insurance policy,loss to the insured automobile is covered even in an accident that is the fault of the insured.

Correct AnswerverifiedShow Answer

Most fire insurance policies are issued using the Delaware standard fire insurance policy form.

Correct AnswerverifiedShow Answer

An insurance broker is the agent of the insurance company.

Correct AnswerverifiedShow Answer

If a car insurance policy provides that it will pay the medical expenses of other drivers who are injured through the actions of the insured,the coverage is:

Correct AnswerverifiedShow Answer

Which of the following is true about no-fault auto insurance?

Correct AnswerverifiedShow Answer

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verified

Correct Answer
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Correct Answer
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True

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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True

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Correct Answer
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