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Webce Life and Health Insurance Final Exam Questions and Answers (Verified Answers) 1.Rory's parents offered to buy him a new car to take to college, but Rory turned them down because he was afraid the car would be stolen or damaged if he parked it on campus. In deciding not to own a car, what risk management technique did Rory employ ANS
: risk avoidance
2.Which of the following is most likely to be an insurable risk ANS
: The chance that a fire will destroy a building
3.Theodore pays an annual premium to the insurance company that covers many of the risks associated with Theodore's business. What risk manage- ment technique is Theodore using ANS
: risk transfer 1 / 4
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4.The possibility that a fire will damage Fay's store building is a pure risk. Why ANS
: It involves only the chance of a loss.
5.Esther, an underwriter for QRS Insurance Company, is not able to provide the coverage requested in Benny's insurance application. Esther can reject the application, or she can
ANS: Make a counteroffer
6.When applying for a businessowners insurance policy, Brandy did not mention that hazardous and illegal activity that goes on in the backroom of her shop because she realized no insurer that knew about it would insure her business. What is Brandy's failure to disclose this activity considered ANS
: Con- cealment
7.Haze's store has an automatic sprinkler system that will be activated by a fire. In exchange for the reduced fire insurance premium, she signs a docu- ment stating that the automatic sprinkler system will always be in operating condition. What is this statement 2 / 4 Download at gaviki.comDownload at gaviki.com
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ANS
: A Warranty
8.Tom's insurance company wanted to deny Tom's claim based on an ex- clusion in Tom's policy, but Tom and his lawyer convinced the court that the exclusion was ambiguous and did not clearly apply to Tom's case. Because the policy is a contract of adhesion, what will the court do ANS
: Rule in Tom's favor
9.Evangeline bought he home with 20 percent down payment and mortgage from Trevor Bank. She had not yet paid off the mortgage when the home was badly damaged in an explosion. Who had an insurable interest in the home at the time of the loss ANS
: both Evangeline and Trevor Bank
10.For an insurer to pay a property or casualty claim, when must the policy- holder have an insurable interest in the insured risk ANS
: At the time of the loss 3 / 4
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11.In the context of a property or casualty insurance policy, which of the following is considered to be personal property ANS
: Gas Grille
12.An owner of a property or casualty insurance policy is required to have an insurable interest in the insured risk at the time of the.ANS: Loss of the insured property or occurrence of the insured event
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