Questions wit 100 Correct Answers

Fundamentals Of Insurance (BC) (117 Questions wit 100% Correct Answers) Question : The major function of insurance is:

• To reduce the cost of the losses
• To share the losses of the few among the many
• The safeguard the interest of mortgages
• To serve as a basis of existing credit system

Correct answer: b. To share the losses of the few among the

many

Question : A peril if best defined as:

• The chance of a loss
• The occurrence of a loss
• The cause of a loss
• The result of a loss

Correct answer: c. The cause of a loss

Question : Indemnify means:

• Returning the premium of the insured
• Restoring the insured's to the same financial position as

they were in immediately prior to the loss

• Paying the insured's the face amount of the policy
• Restoring the insured's to the same financial position as

they were

Correct answer: b. Restoring the insured's to the same

financial position as they were immediately prior to the loss

Question : Property insurance contracts are designed to pay

for loss or damage arising out of the happening of a specific event. Only the following statement regarding the events

insured by property insurance contract is correct:

• The event must be a future event and it must be accidental
• The event may happen with the co-operation of the insured
• The event may happen with the intent of the insured

• The event may occur accidentally or be caused deliberately

by the insured

Correct answer: a. The event must be must be a future event

and it must be accidental

Question : The following is the most practical way in which

to deal with risk:

• Avoidance of Risk
• Retention of Risk
• Controlling of Risk
• Transfer of Risk

Correct answer: d. Transfer of Risk

Question : In a contract of insurance, consideration means:

• The exchange of something of value parties
• The amount the insurance can collect in event of a claim
• The object of insurance

• The reviewing of the details of the risk to be insured by an

underwriter

Correct answer: a. The exchange of something of value

between parties

Question : Which of the following would be correct legal

name of the insured in a contact of insurance:

• The corner store
• John's Corner Store
• J.D.'s Corner Store
• The Corner Store Ltd

Correct answer: d. The Corner Store Ltd

Question : All contracts require that five elements be present

if the contract is to be enforceable by law. An insurance contract is enforceable only if it contains the following three

additional interest:

• Insurable Interest, Utmost Good Faith