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Question 1 of 10
1. Question
Why does an insurer want to avoid underinsurance in the amount of compensation?
Correct
Both signs in the amount of compensation of underinsurance and over-insurance are moral hazards, if the insured has underestimated the total value of the property insured and files a partial loss claim which is known as underinsurance, his claim may be reduced in the same proportion as the sum insured bears to the actual total value. Likewise, over-insurance is the overstatement of the value of the property insured because it would be better for the insured to make a claim rather than keeping the property.
Incorrect
Both signs in the amount of compensation of underinsurance and over-insurance are moral hazards, if the insured has underestimated the total value of the property insured and files a partial loss claim which is known as underinsurance, his claim may be reduced in the same proportion as the sum insured bears to the actual total value. Likewise, over-insurance is the overstatement of the value of the property insured because it would be better for the insured to make a claim rather than keeping the property.
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Question 2 of 10
2. Question
A commonly cited case of the insured jettisons part or all of the cargo to prevent the ship from capsizing, is an example for which case of compensation of insurance?
Correct
The ‘general average’ is the term that means compensation for the insured in the case where the insured was forced to dispose of some of the insured goods to salvage the overall enterprise. The term explains in what sense the insured goods will receive compensation.
Incorrect
The ‘general average’ is the term that means compensation for the insured in the case where the insured was forced to dispose of some of the insured goods to salvage the overall enterprise. The term explains in what sense the insured goods will receive compensation.
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Question 3 of 10
3. Question
What is the idea behind ‘liability insurance’?
Correct
Liability insurance covers legal liability related to bodily injury, property damage, financial loss, or reputational damage caused by the insured to a third party because of negligence or other types of tort are covered, that indemnifies the insured for the losses.
Incorrect
Liability insurance covers legal liability related to bodily injury, property damage, financial loss, or reputational damage caused by the insured to a third party because of negligence or other types of tort are covered, that indemnifies the insured for the losses.
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Question 4 of 10
4. Question
What defines “ tort law” in terms of insurance?
Correct
Tort comes from the Latin word for ‘twisted’, the idea being that something has gone wrong and has to be straightened out. The legal framework under which liability claims operate is that of tort law. It suggests that people must be indemnified for the wrongs of which they fell victims. There are many categories of a tort, but the most important for liability insurance is negligence, which is the person who couldn’t take care of something they were given a duty to act.
Incorrect
Tort comes from the Latin word for ‘twisted’, the idea being that something has gone wrong and has to be straightened out. The legal framework under which liability claims operate is that of tort law. It suggests that people must be indemnified for the wrongs of which they fell victims. There are many categories of a tort, but the most important for liability insurance is negligence, which is the person who couldn’t take care of something they were given a duty to act.
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Question 5 of 10
5. Question
How do you believe the evangelical principle by the saying “thou shalt love thy neighbor as thyself” have been used by the lawyers and judges for a different focus and purpose?
Correct
When the rule book declares that one has to love their neighbor, it becomes in law that one must not injure their neighbor. One must take reasonable care to avoid acts or omissions which can reasonably foresee that it would be likely to injure their neighbor.
Incorrect
When the rule book declares that one has to love their neighbor, it becomes in law that one must not injure their neighbor. One must take reasonable care to avoid acts or omissions which can reasonably foresee that it would be likely to injure their neighbor.
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Question 6 of 10
6. Question
What is the difference in the principle of indemnity between property insurance and liability insurance?
Correct
The victim receives from the insured compensation for a number of heads of damages, and the insurer indemnifies the insured for the compensation that the insured had to pay to the victim, thereby restating the insured to the financial position that he had before indemnifying the victim. It is insured and not the victim that must be reinstated to his initial financial position.
Incorrect
The victim receives from the insured compensation for a number of heads of damages, and the insurer indemnifies the insured for the compensation that the insured had to pay to the victim, thereby restating the insured to the financial position that he had before indemnifying the victim. It is insured and not the victim that must be reinstated to his initial financial position.
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Question 7 of 10
7. Question
Which of these options do not count in the cover heads of damages in liability insurance?
Correct
Liability insurance cover heads of damages that include:
• Damage to third-party property.
• Cost of care.
• Loss of earnings.
• Financial loss.
• Pain and suffering.
• Exemplary damages.
• Claimant’s legal costs.
• Defence costs.Incorrect
Liability insurance cover heads of damages that include:
• Damage to third-party property.
• Cost of care.
• Loss of earnings.
• Financial loss.
• Pain and suffering.
• Exemplary damages.
• Claimant’s legal costs.
• Defence costs. -
Question 8 of 10
8. Question
Some policies are characterized by long-tail claims. What do you think the term long-tail means?
Correct
A long-tail claim or liability is a kind of liability that carries a long settlement period. Long-tail liabilities are likely to result in IBNR, high incurred but not reported claims, because it will take a long time for the claims to be settled.
Incorrect
A long-tail claim or liability is a kind of liability that carries a long settlement period. Long-tail liabilities are likely to result in IBNR, high incurred but not reported claims, because it will take a long time for the claims to be settled.
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Question 9 of 10
9. Question
What are the two basic categories of Reinsurance?
Correct
When multiple insurance companies share risk by purchasing insurance policies from other insurers to limit their own total loss in case of disaster, it is known as Reinsurance, which is described as “insurance of insurance companies”. It is divided into two basic categories known as the treaty and facultative reinsurance.
Incorrect
When multiple insurance companies share risk by purchasing insurance policies from other insurers to limit their own total loss in case of disaster, it is known as Reinsurance, which is described as “insurance of insurance companies”. It is divided into two basic categories known as the treaty and facultative reinsurance.
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Question 10 of 10
10. Question
What do you understand by treaty reinsurance?
Correct
The insurance purchased by an insurance company from another insurer is known as the treaty insurance. The company that issues the insurance is called the “cedent”, who passes on all the risks to the purchasing company who is the reinsurer, of a specific class of policies. When insurance companies underwrite a new policy, they agree to take on additional risk in exchange for a premium. The more policies an insurer underwrites, the more risk it assumes. One way an insurer can reduce its exposure is to cede some of the risks to a reinsurance company in exchange for a fee. Reinsurance allows the insurer to free up risk capacity and to protect itself from high severity claims.
Incorrect
The insurance purchased by an insurance company from another insurer is known as the treaty insurance. The company that issues the insurance is called the “cedent”, who passes on all the risks to the purchasing company who is the reinsurer, of a specific class of policies. When insurance companies underwrite a new policy, they agree to take on additional risk in exchange for a premium. The more policies an insurer underwrites, the more risk it assumes. One way an insurer can reduce its exposure is to cede some of the risks to a reinsurance company in exchange for a fee. Reinsurance allows the insurer to free up risk capacity and to protect itself from high severity claims.