Dear Aspirants, Welcome to Insurance Awareness Questions in ambitiousbaba.com. Here we are covering some important questions for insurance exams.
Question 1: The legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it is termed as _____
A. Straight Life Annuity
B. Subrogation
C. Structured Settlement
D. Subjective Risk
Question 2: Term insurance that covers a specific period of time and which cannot be renewed is called ________
A. Straight Life Annuity
B. Straight term
C. Structured Settlement
D. Subjective Risk
Question 3: The result of the policyholder’s failure to buy sufficient insurance is termed as ________
A. Hospital Insurance
B. Hull Insurance
C. Under Insurance
D. Title Insurance
Question 4: Insurance that indemnifies the owner of real estate in the event that his or her clear ownership of property is challenged by the discovery of faults in the title is called _______
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Title Insurance
Question 5: Coverage against loss through stealing by individuals not in a position of trust is called ________
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Theft Insurance
Question 6: What is the Principle of Insurance called under which the insured can claim the compensation only to the extent of actual loss either from all insurers or from any one insurer?
A Insurable Interest
B Principle of Subrogation
C Principle of Contribution
D Double insurance
Question 7: What is the Principle of Insurance called under which insured must always try his level best to minimize the loss of his insured property, in case of uncertain events?
A Principle of Loss Minimization
B Principle of Subrogation
C Principle of Proximate Cause
D Principle of Indemnity
Question 8: What is the Principle of Insurance called which is applicable when the loss is the result of two or more causes?
A Double Insurance
B Principle of Subrogation
C Principle of Proximate Cause
D Principle of Indemnity
Question 9: What is called when insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal?
A Nature of contract
B Utmost Good Faith
C Principle of Contribution
D Double Insurance
Question 10: Which of the following principles of Insurance denotes insurance of same subject matter with two different companies or with the same company under two different policies?
A Principle of Proximate Cause
B Principle of Subrogation
C Double insurance
D Principle of Indemnity
SOLUTION
1. B
Explanation:
Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured.
2. B
Explanation:
Straight term insurance is a term insurance that covers a specific period of time and which cannot be renewed.
3. C
Explanation:
Under insurance is the state of an individual having some form of health insurance that does not offer complete financial protection.
4. D
Explanation:
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property.
5. D
6. D
Explanation:
Principle of Contribution is a corollary of the principle of indemnity. It applies to all contracts of indemnity, if the insured has taken out more than one policy on the same subject matter. According to this principle, the insured can claim the compensation only to the extent of actual loss either from all insurers or from any one insurer. If one insurer pays full compensation then that insurer can claim proportionate claim from the other insurers.
7. A
Explanation:
According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to control and reduce the losses in such a scenario.
Also called Mitigation Principle.
8. A
Explanation:
Proximate cause or Principle of ‘CAUSA PROXIMA’ literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. This principle is applicable when there are series of causes of damage or loss.
The loss of insured property can be caused by more than one cause in succession to another.
9. A
10. C
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