answer only Fire Casulty test

Out of 24 questions, you answered 21 correctly (88%).

To move to the next section, please correct all the questions you got wrong which are highlighted in yellow then click continue button.
(Answers are in red)

It is a course requirement that you must answer 100% of the questions correctly before preceeding to the next session.

1. Insurance is a contract whereby one undertakes to indemnify another against:

Damage

D-According to the California Code of Insurance, insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event. Pg. 33

2. A peril is:

the actual cause of the loss.

C- A Peril is the actual cause of the loss. Some examples of common perils are fire, wind, hail, collision with another car, theft, etc.

3. The uncertainty or chance of a loss occurring is known as:


risk.


B- Risk is the uncertainty or chance of a loss occurring.

4. Which of the following are the main types of risks?
Speculative and Pure


C- There are two main types of risk: pure risk and speculative risk.

5. A hazard is best defined as:
anything that increases the chance of loss or severity of loss due to a peril.


B- A Hazard is anything that increases the chance of loss or severity of loss due to a peril.

6. A hazard that deals with a person`s mental attitude, behavior and habits is an example of:

Moral hazard
C- Moral hazards deal with a person`s mental attitudes, behaviors, and habits. Some examples of moral hazards are drug abuse, dishonest claims, alcoholism, smoking, driving over the speed limit.


7. The law of large numbers is a principal that basically says:.
the larger the amount of information gathered, the more reliable that information will be.

D- The law of large numbers is a principle that basically says, the larger the amount of information gathered, the more reliable that information will be.

8. The term loss exposure refers to:

the possibility of a loss.


B- Exposure means there is a possibility of a loss. Loss Exposure is the degree to which a person or their property is at risk for loss.

9. The degree of loss a person/organization faces from suits brought by a third party refers to:
Liability Loss Exposure


A- Liability Loss Exposure is the degree of loss a person/organization faces from suits brought by a third party.

10. Which of the following is NOT required for a risk to be ideally insurable?

The loss must occur on the insured`s property.


C- A loss may not occur on the insured`s property, such as a liability claim.

11. Any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest or create a liability against him/her, may be insured against. The more unpredictable a loss becomes:
the more insurable it becomes.


A-The more predictable a loss becomes, the less insurable it becomes. The more unpredictable a loss becomes, the more insurable it becomes.

12. Restoring the insured back to the condition he or she was in before the loss occurred is known as:

Indemnification

Restoring the insured back to the condition he or she was in before the loss occurred is known as:

13. The process of reviewing applications for insurance and the information on the application is:


Underwriting

D-Underwriting is the process of reviewing applications for insurance and the information on the application.

14. Which of the following is NOT a known private insurer?

Bond Insurance Companies


C-Bond insurance companies are not considered insurers.

15. Bob is thinking about obtaining insurance because he just found out he needs extensive surgery that will require several days in the hospital. This situation of waiting until the last minute to obtain insurance is known as:

Adverse Selection


B-Adverse selection is when people seek insurance at the last minute when they really need it.

16. Loss control refers to:

taking the necessary precautions that will reduce the risk of a loss.


B-Loss control refers to taking necessary precautions to reduce the risk of a loss.

17. Which of the following is the amount of money the insured pays before the insurer pays for the rest of the claim?

Deductible

D-A deductible is the amount of money the insured pays before the insurer (company) pays the rest of the claim.

18. Which of the following statements is true about reinsurance?

Reinsurance is the process whereby the insurer transfers all or part of the risk to another company.

D- Reinsurance is the process of the insurer transferring all or part of D- Reinsurance is the process whereby the insurer transfers all or part of the risk to another insurer so they share the risk together.

19. Which of the following is defined as `an agreement between two or more parties enforceable by law?`
Contract


A-A contract is defined as an agreement between two or more parties enforceable by law.

20. What are the two types of torts?

Intentional & Unintentional


C-Torts are classified as intentional or unintentional (referred to as negligence).

21. Which of the following elements of a contract is/are the binding force?

Consideration


C-Consideration is the binding force of a contract. What each party considers valuable is the consideration.


22. Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain.

Fraud

D-Fraud occurs when one party intentionally gives the other party false information in order to benefit from the unlawful gain.

23. When a right or privilege has been given up, a party cannot reassert that right or privilege. The process of preventing the party from reasserting that right or privilege is known as:
Estoppel


A-This process of preventing a party from reasserting that right or privilege is known as estoppel.


24. According to the California insurance law, either party may rescind a contract for any of the following reasons EXCEPT:

Once a contract is signed, it can never be rescinded.