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Question 1 of 10
1. Question
What is the use of reinsurance?
Correct
Reinsurance improves the rate of stability.
Incorrect
Reinsurance improves the rate of stability.
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Question 2 of 10
2. Question
Having policy limits allows the policyholder to choose
Correct
The premium will be lower for lower policy limits.
Incorrect
The premium will be lower for lower policy limits.
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Question 3 of 10
3. Question
What is the critical part of loss reserving?
Correct
It helps to achieve a loss reserve estimate that is as close as possible.
Incorrect
It helps to achieve a loss reserve estimate that is as close as possible.
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Question 4 of 10
4. Question
Why would someone pay a gross premium for an insurance contract that must exceed the expected value of the loss?
Correct
The principle of decreasing marginal utility of money applies to anyone who is a risk average.
Incorrect
The principle of decreasing marginal utility of money applies to anyone who is a risk average.
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Question 5 of 10
5. Question
Which of the following is an advantage of the coinsurance clause?
Correct
The coinsurance clause offers an easy method to compensate for the distorted loss distribution.
Incorrect
The coinsurance clause offers an easy method to compensate for the distorted loss distribution.
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Question 6 of 10
6. Question
What is the basic requirement of the regulatory agencies?
Correct
The goal of regulatory agencies is to protect the public by paying all expenses and losses.
Incorrect
The goal of regulatory agencies is to protect the public by paying all expenses and losses.
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Question 7 of 10
7. Question
How do collision premiums vary?
Correct
Vehicle form is based on its price plus a harm index and repair costs.
Incorrect
Vehicle form is based on its price plus a harm index and repair costs.
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Question 8 of 10
8. Question
In an insurance policy, What is the use of a peril?
Correct
Fire, Collision, Earthquake, Theft, and Illness are some examples of perils.
Incorrect
Fire, Collision, Earthquake, Theft, and Illness are some examples of perils.
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Question 9 of 10
9. Question
If you require a loan for the purchase of a car, Which of the following does the financial institution require?
Correct
It comes under the financial responsibility limits of automobile insurance.
Incorrect
It comes under the financial responsibility limits of automobile insurance.
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Question 10 of 10
10. Question
How would you define comprehensive coverage?
Correct
The majority of perils are included, however excluding war, acts of terrorism. damage due to wear and tear, road damage to tires, radioactive contamination. damage due to the discharge of a nuclear weapon, and, of course, collision.
Incorrect
The majority of perils are included, however excluding war, acts of terrorism. damage due to wear and tear, road damage to tires, radioactive contamination. damage due to the discharge of a nuclear weapon, and, of course, collision.