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Unformatted text preview: Chapter 10 Analysis of Insurance Contracts 1) The portion of a property and liability insurance contract that contains information about the property or activity to be insured is called the A) declarations. B) insuring agreement. C) exclusions. D) conditions. Answer: A Question Status: Previous Edition 2) What information is contained in the insuring agreement of an insurance policy? A) a description of the property or life to be insured B) a summary of the major promises of the insurer C) a summary of the obligations of the insured D) a list of the property, losses, and perils that are excluded Answer: B Question Status: Previous Edition 3) Which of the following statements about all- risks coverage is (are) true? I. All losses are covered except those losses specifically excluded. II. The burden of proof is on the insured to prove that a loss is covered. A) I only B) II only C) both I and II D) neither I nor II Answer: A Question Status: Previous Edition 4) The exclusion of flood in a homeowners policy is an example of an A) excluded activity. B) excluded condition. C) excluded property. D) excluded peril. Answer: D Question Status: Previous Edition 112 Rejda Principles of Risk Management and Insurance , Tenth Edition 5) Exclusions are used in insurance policies for all of the following reasons EXCEPT A) to reduce moral hazard. B) to waive policy conditions. C) to eliminate coverage for uninsurable perils. D) to eliminate coverage not needed by typical insureds. Answer: B Question Status: Previous Edition 6) Reasons why a peril may be considered uninsurable and therefore excluded from insurance contracts include which of the following? I. The losses from the occurrence of the peril may be due to a predictable decline in value. II. The losses from the occurrence of the peril may be incalculable and catastrophic. A) I only B) II only C) both I and II D) neither I nor II Answer: C Question Status: Previous Edition 7) The policy provision requiring the filing of proof of loss with the insurer is an example of a(n) A) declaration. B) condition. C) insuring agreement. D) miscellaneous provision. Answer: B Question Status: Previous Edition 8) Which of the following statements about the definition of the insured is (are) true? I. In some cases, a person who is not specifically named may be classified as an insured. II. Under no circumstances can more than one person be named as an insured. A) I only B) II only C) both I and II D) neither I nor II Answer: A Question Status: Revised Chapter 10 Analysis of Insurance Contracts 113 9) All of the following statements about endorsements and riders are true EXCEPT A) They are usually written....
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This note was uploaded on 06/15/2011 for the course RIM 3331 taught by Professor Papp during the Spring '11 term at Troy.
- Spring '11