AINS PRACTICE EXAM WITH
CORRECT ANSWERS
Which two of the four quadrants of risk are classified as pure
risks?
Select one:
A. Hazard risks and operational risks
B. Hazard risks and strategic risks
C. Operational risks and financial risks
D. Financial risks and strategic risks - CORRECT ANS...
Which two of the four quadrants of risk are classified as pure
risks?
Select one:
A. Hazard risks and operational risks
B. Hazard risks and strategic risks
C. Operational risks and financial risks
D. Financial risks and strategic risks - CORRECT ANSWER-A.
Hazard risks and operational risks
Correct. Hazard risks and operational risks are pure risks.
Because insurance contracts impose an obligation for ethical
practices and behaviors on the parties while dealing with one
another, an insurance contract is called a
Select one:
A. Contract of indemnity.
B. Contract of adhesion.
C. Contract of utmost good faith.
D. Conditional contract. - CORRECT ANSWER-C. Contract of
utmost good faith.
,Correct.Insurance contacts are considered contracts of utmost
good faith because both parties are obligated to ethical
practices and behaviors while dealing with one another.
Winston is skimming through his new personal auto policy that
just arrived. Winston discovers that every insurance policy is
represented through a collection of policy provisions. He
discovers all of the following policy provisions, EXCEPT:
Select one:
A. Conditions
B. Definitions
C. Exceptions
D. Declarations - CORRECT ANSWER-C. Exceptions
Correct. Winston finds the policy provisions of conditions,
definitions, and declarations. The other two main provisions in a
policy are the insuring agreement, and the exclusions.
Sean was driving and caused an injury to a pedestrian named
Wilbur. In the context of the resulting claim made to Sean's
insurance company and assigned to Andrea in the claims
department, Sean and Wilbur and Andrea are, respectively,
Select one:
A. Claimant and claims representative and insured
B. Claimant and insured and claims representative
C. Insured and claimant and claims representative
D. Claims representative and insured and claimant -
CORRECT ANSWER-C. Insured and claimant and claims
representative
Correct. In this scenario, Sean and Wilbur and Andrea, are,
respectively, insured (Sean), claimant (Wilbur), and claims
representative (Andrea).
Risk control can assist the claims department by
Select one:
A. Reporting the existence of new operations.
, B. Designing product recall procedures.
C. Developing safety management programs.
D. Providing laboratory analyses. - CORRECT ANSWER-D.
Providing laboratory analyses.
Correct. Risk control can assist the claims department by
providing laboratory analyses.
When the Smiths purchased their first home, they were
required to purchase a homeowners insurance policy in order
to get a mortgage. Because they did not have a lot of extra
money in their budget, they wanted to buy as little insurance
coverage as possible. The Smiths' insurance agent advised
them that if they purchase an insurance policy that adequately
covers damage to their home and personal property, they only
have to budget for the insurance premium, rather than the full
cost of rebuilding the house and replacing its contents. Which
one of the following key components of insurance is the
insurance agent explaining to the Smiths?
Select one:
A. Risk
B. Pooling
C. Transfer
D. Risk control - CORRECT ANSWER-C. Transfer
Correct. The insurance agent is explaining the concept of
transferring the financial consequences of unanticipated events
to an insurer.
Because the insurance company usually determines policy
wording and the insured has little choice but to "take it or leave
it," an insurance contract is a
Select one:
A. Bilateral contract.
B. Nontransferable contract.
C. Contract of indemnity.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller supergrades1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
