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FundamentalLegalPrinciples - Exam Name MULTIPLE CHOICE...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) 1) Fundamental purposes of the principle of indemnity include which of the following? I. To reduce physical hazards. II. To prevent the insured from profiting from insurance. A) I only B) II only C) both I and II D) neither I nor II 2) 2) Which of the following is a fundamental purpose of the principle of indemnity? 3) 3) Sam's stereo was destroyed by a fire. The stereo cost $1200 when it was purchased, but a similar new stereo now costs $1800. Assuming the stereo was 50 percent depreciated, what is the actual cash value of Sam's loss? 4) 4) All of the following are exceptions to the principle of indemnity EXCEPT 5) 5) Under which of the following rules is actual cash value determined by taking into consideration all relevant factors an expert would use to determine the value of the property? A) the objective value rule B) the circumstantial evidence rule C) the broad evidence rule D) the property indemnity rule 6) 6) A total loss under a valued policy is settled on the basis of the 7) 7) Which of the following statements describes how losses will be settled if a property insurance policy is written on a replacement cost basis? 1
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8) 8) Which of the following statements about the principle of insurable interest is (are) true? I. It makes it difficult to measure the amount of an insured's loss. II. It reduces moral hazard. 9) 9) All of the following will support an insurable interest for purposes of purchasing property and liability insurance EXCEPT A) ties of blood and marriage. B) a creditor - debtor relationship. C) potential legal liability. D) a contract right.
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FundamentalLegalPrinciples - Exam Name MULTIPLE CHOICE...

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