MULTIPLE-CHOICE QUESTIONS WITH ANSWERS RELATED TO OBLIGATIONS AND RIGHTS OF INSURER AND INSURED
What is the primary obligation of an insurer towards the insured?
A) To provide accurate information about the policy
B) To pay the premium on time
C) To indemnify the insured against covered risks
D) To refuse claims
Answer: C) To indemnify the insured against covered risks
Which of the following is a right of the insured in India?
A) To deny providing accurate information
B) To refuse to pay the premium
C) To receive compensation for covered losses
D) To cancel the insurance policy unilaterally
Answer: C) To receive compensation for covered losses
What obligation does the insured have towards the insurer?
A) To pay the premium on time
B) To deny all claims made by the insurer
C) To ignore policy terms and conditions
D) To avoid notifying the insurer of any changes in circumstances
Answer: A) To pay the premium on time
Which of the following rights does an insurer typically have in India?
A) To reject all claims without investigation
B) To cancel the policy without notice
C) To conduct investigations into claims
D) To refuse to provide policy documents
Answer: C) To conduct investigations into claims
What is the responsibility of the insured regarding disclosure of material facts?
A) To disclose all information regardless of relevance
B) To conceal information to lower premiums
C) To disclose all material facts accurately
D) To provide false information to expedite the application process
Answer: C) To disclose all material facts accurately
What action can an insurer take if the insured fails to pay the premium on time?
A) Cancel the policy immediately
B) Provide an extension indefinitely
C) Charge a late fee and cancel the policy if payment is not received within the grace period
D) Increase coverage without consent
Answer: C) Charge a late fee and cancel the policy if payment is not received within the grace period
In case of a dispute between the insurer and the insured, what recourse is available to the insured?
A) The insured has no recourse
B) The insured can file a complaint with the insurance ombudsman
C) The insured can file a lawsuit directly against the insurer
D) The insured must accept the decision of the insurer without question
Answer: B) The insured can file a complaint with the insurance ombudsman
What is the consequence of the insured breaching the duty of utmost good faith?
A) The insured loses all rights under the policy
B) The insurer must compensate the insured regardless
C) The insurer can void the policy from inception
D) The insurer must lower premiums for the insured
Answer: C) The insurer can void the policy from inception
What is the insurer’s obligation regarding policy documents?
A) To withhold policy documents until requested
B) To provide policy documents promptly after issuing the policy
C) To charge additional fees for policy documents
D) To refuse to provide policy documents
Answer: B) To provide policy documents promptly after issuing the policy
Which party typically has the right to cancel an insurance policy in India?
A) Only the insurer
B) Only the insured
C) Both the insurer and the insured
D) Neither the insurer nor the insured
Answer: C) Both the insurer and the insured
What is the insured’s right regarding the review of claim decisions?
A) The insured has no right to contest claim decisions
B) The insured can only contest claim decisions in court
C) The insured can request a review of claim decisions by the insurer
D) The insured can modify claim decisions without informing the insurer
Answer: C) The insured can request a review of claim decisions by the insurer
What action can the insurer take if the insured makes a fraudulent claim?
A) Increase coverage for the insured
B) Deny the fraudulent claim and continue coverage
C) Cancel the policy and refuse future claims
D) Offer compensation without investigating the fraud
Answer: C) Cancel the policy and refuse future claims
What happens if the insured fails to disclose material information during the application process?
A) The insurer must honor the policy regardless
B) The insurer can void the policy from inception
C) The insured can demand lower premiums
D) The insurer must compensate the insured regardless
Answer: B) The insurer can void the policy from inception
What is the insured’s obligation in the event of a loss covered by the policy?
A) To conceal the loss from the insurer
B) To exaggerate the extent of the loss
C) To mitigate the loss and notify the insurer promptly
D) To delay notifying the insurer indefinitely
Answer: C) To mitigate the loss and notify the insurer promptly
What rights does the insurer have if the insured breaches policy terms?
A) None, the insurer must continue coverage
B) Increase coverage without consent
C) Cancel the policy and refuse future claims
D) Offer compensation without investigating the breach
Answer: C) Cancel the policy and refuse future claims
What is the purpose of the grace period provided by insurers for premium payment?
A) To avoid cancellation of the policy
B) To allow the insured to delay payment indefinitely
C) To charge additional fees for late payment
D) To increase coverage automatically
Answer: A) To avoid cancellation of the policy
What is the insured’s responsibility regarding changes in risk factors during the policy term?
A) To ignore changes in risk factors
B) To notify the insurer promptly of any changes
C) To hide changes in risk factors to avoid premium increase
D) To wait until renewal to inform the insurer of changes
Answer: B) To notify the insurer promptly of any changes
What recourse does the insured have if the insurer refuses a valid claim?
A) None, the insured must accept the decision
B) The insured can file a complaint with the regulatory authority
C) The insured can only contest the decision in court
D) The insured can cancel the policy without penalty
Answer: B) The insured can file a complaint with the regulatory authority
Which of the following is an obligation of the insured in the event of a loss?
A) To refrain from reporting the loss to the insurer
B) To provide false information about the loss
C) To cooperate with the insurer in the investigation of the claim
D) To delay reporting the loss to the insurer indefinitely
Answer: C) To cooperate with the insurer in the investigation of the claim
What is the insurer’s obligation if the insured fails to disclose a pre-existing medical condition?
A) Increase coverage for the insured
B) Void the policy from inception
C) Pay all medical expenses regardless
D) Cancel the policy and refuse future claims related to the condition
Answer: D) Cancel the policy and refuse future claims related to the condition
In case of dispute, what is the insured’s right regarding the selection of arbitrators?
A) The insured must accept the insurer’s choice of arbitrators
B) The insured can only choose arbitrators from the insurer’s list
C) The insured has the right to choose an arbitrator mutually agreed upon by both parties
D) The insured has no right to arbitration
Answer: C) The insured has the right to choose an arbitrator mutually agreed upon by both parties
What is the insurer’s responsibility in case of policy renewal?
A) To increase premiums without notice
B) To refuse renewal without cause
C) To provide renewal terms and conditions to the insured in a timely manner
D) To cancel the policy without notice
Answer: C) To provide renewal terms and conditions to the insured in a timely manner
What rights does the insured have regarding the review of policy terms and conditions?
A) The insured cannot review policy terms and conditions
B) The insured can only review policy terms and conditions upon renewal
C) The insured has the right to review policy terms and conditions at any time
D) The insured must accept policy terms and conditions without review
Answer: C) The insured has the right to review policy terms and conditions at any time
What happens if the insured fails to pay the premium even after the grace period?
A) The insurer must continue coverage indefinitely
B) The insurer can cancel the policy without notice
C) The insurer must increase coverage
D) The insurer must reduce coverage
Answer: B) The insurer can cancel the policy without notice
What is the insured’s obligation regarding the usage of the insured property?
A) To disregard any restrictions on usage mentioned in the policy
B) To ensure the property is used only for the specified purposes in the policy
C) To modify the usage of the property without informing the insurer
D) To allow others to use the property without permission
Answer: B) To ensure the property is used only for the specified purposes in the policy
What rights does the insurer have if the insured fails to fulfill policy conditions?
A) None, the insurer must continue coverage
B) To cancel the policy and refuse future claims
C) To provide additional coverage without consent
D) To ignore policy conditions
Answer: B) To cancel the policy and refuse future claims
What is the insured’s obligation regarding the submission of a claim?
A) To delay submitting the claim indefinitely
B) To submit the claim promptly after the occurrence of the loss
C) To avoid submitting the claim altogether
D) To submit the claim only if it exceeds a certain threshold
Answer: B) To submit the claim promptly after the occurrence of the loss
What rights does the insurer have regarding the investigation of claims?
A) None, the insurer must honor all claims without investigation
B) To refuse to investigate claims
C) To conduct investigations into the validity of claims
D) To delay investigations indefinitely
Answer: C) To conduct investigations into the validity of claims
What happens if the insured fails to disclose previous claims history?
A) The insurer must continue coverage regardless
B) The insurer can increase premiums without notice
C) The insurer can void the policy from inception
D) The insurer must reduce coverage
Answer: C) The insurer can void the policy from inception
What rights does the insurer have regarding changes in risk factors during the policy term?
A) To ignore changes in risk factors
B) To increase coverage automatically
C) To charge additional premiums or amend the policy terms
D) To refuse any changes
Answer: C) To charge additional premiums or amend the policy terms
What is the primary obligation of the insured towards the insurer regarding the insurance application process?
A) To provide inaccurate information to reduce premiums
B) To disclose all material facts accurately
C) To withhold information to avoid scrutiny
D) To delay the application process indefinitely
Answer: B) To disclose all material facts accurately
In case of a dispute between the insurer and the insured, what alternative dispute resolution mechanism is available besides litigation?
A) Arbitration
B) Mediation
C) Both A and B
D) None of the above
Answer: C) Both A and B
What is the insurer’s obligation regarding policy documentation at the time of issuance?
A) To delay providing policy documents indefinitely
B) To provide policy documents promptly after issuance
C) To charge additional fees for policy documents
D) To refuse to provide policy documents
Answer: B) To provide policy documents promptly after issuance
What is the insured’s obligation regarding premium payment?
A) To avoid paying premiums until requested by the insurer
B) To pay premiums on time as specified in the policy
C) To delay premium payments indefinitely
D) To refuse premium payments
Answer: B) To pay premiums on time as specified in the policy
What rights does the insured have if the insurer cancels the policy without valid reasons?
A) The insured can only contest the cancellation in court
B) The insured has no recourse against the cancellation
C) The insured can file a complaint with the regulatory authority
D) The insured must accept the cancellation without question
Answer: C) The insured can file a complaint with the regulatory authority
What happens if the insured breaches the duty of utmost good faith?
A) The insurer must compensate the insured regardless
B) The insurer can void the policy from inception
C) The insured can demand lower premiums
D) The insurer must increase coverage
Answer: B) The insurer can void the policy from inception
What rights does the insurer have regarding policy cancellation?
A) To cancel the policy without notice
B) To cancel the policy only upon mutual agreement with the insured
C) To refuse policy cancellation under any circumstances
D) To cancel the policy and refuse future claims
Answer: B) To cancel the policy only upon mutual agreement with the insured
What is the insured’s responsibility regarding the notification of changes in circumstances during the policy term?
A) To ignore changes in circumstances
B) To notify the insurer promptly of any changes
C) To conceal changes in circumstances to avoid scrutiny
D) To delay notifying the insurer indefinitely
Answer: B) To notify the insurer promptly of any changes
What rights does the insurer have regarding the review of policy terms and conditions?
A) To modify policy terms and conditions without notice
B) To refuse any review of policy terms and conditions
C) To provide policy terms and conditions to the insured upon request
D) To increase premiums without updating policy terms and conditions
Answer: C) To provide policy terms and conditions to the insured upon request
What happens if the insured fails to disclose previous claims history?
A) The insurer must continue coverage regardless
B) The insurer can increase premiums without notice
C) The insurer can void the policy from inception
D) The insurer must reduce coverage
Answer: C) The insurer can void the policy from inception
What rights does the insurer have regarding the investigation of claims?
A) To ignore claims without investigation
B) To delay investigations indefinitely
C) To conduct investigations into the validity of claims
D) To deny all claims without investigation
Answer: C) To conduct investigations into the validity of claims
What is the insured’s obligation regarding the usage of the insured property?
A) To disregard any restrictions on usage mentioned in the policy
B) To modify the usage of the property without informing the insurer
C) To ensure the property is used only for the specified purposes in the policy
D) To allow others to use the property without permission
Answer: C) To ensure the property is used only for the specified purposes in the policy
What rights does the insurer have if the insured fails to fulfill policy conditions?
A) None, the insurer must continue coverage
B) To cancel the policy and refuse future claims
C) To provide additional coverage without consent
D) To ignore policy conditions
Answer: B) To cancel the policy and refuse future claims
What is the insured’s obligation regarding the submission of a claim?
A) To delay submitting the claim indefinitely
B) To avoid submitting the claim altogether
C) To submit the claim promptly after the occurrence of the loss
D) To submit the claim only if it exceeds a certain threshold
Answer: C) To submit the claim promptly after the occurrence of the loss
What rights does the insurer have regarding changes in risk factors during the policy term?
A) To ignore changes in risk factors
B) To increase coverage automatically
C) To charge additional premiums or amend the policy terms
D) To refuse any changes
Answer: C) To charge additional premiums or amend the policy terms
What is the primary obligation of the insurer towards the insured regarding claim settlement?
A) To delay claim settlement indefinitely
B) To deny all claims without investigation
C) To settle valid claims promptly
D) To increase coverage for the insured
Answer: C) To settle valid claims promptly
What recourse does the insured have if the insurer breaches the terms of the policy?
A) The insured can only contest the breach in court
B) The insured has no recourse against the breach
C) The insured can file a complaint with the regulatory authority
D) The insured must accept the breach without question
Answer: A) The insured can only contest the breach in court
What is the insurer’s obligation regarding the notification of policy changes to the insured?
A) To refuse to notify the insured of any changes
B) To notify the insured of policy changes in a timely manner
C) To increase premiums without notifying the insured
D) To cancel the policy without notifying the insured
Answer: B) To notify the insured of policy changes in a timely manner
What rights does the insured have if the insurer increases premiums unreasonably?
A) The insured has no recourse against premium increases
B) The insured can only contest premium increases in court
C) The insured can cancel the policy without penalty
D) The insured must accept premium increases without question
Answer: C) The insured can cancel the policy without penalty
What happens if the insured fails to disclose a material fact during the application process?
A) The insurer must continue coverage regardless
B) The insurer can void the policy from inception
C) The insured can demand lower premiums
D) The insurer must reduce coverage
Answer: B) The insurer can void the policy from inception
