MULTIPLE-CHOICE QUESTIONS WITH ANSWERS RELATED TO PRINCIPLES OF INSURANCE AND LOSS ASSESSMENT

Which of the following is not a principle of insurance?
a) Utmost Good Faith
b) Insurable Interest
c) Subrogation
d) Adverse Selection
Answer: d) Adverse Selection

In insurance, what is the principle of utmost good faith?
a) The insurer must disclose all relevant information to the insured.
b) The insured must disclose all relevant information to the insurer.
c) The insurer must hide information from the insured.
d) The insured must hide information from the insurer.
Answer: b) The insured must disclose all relevant information to the insurer.

Which principle of insurance ensures that the insured should have a financial interest in the subject matter of insurance?
a) Indemnity
b) Subrogation
c) Insurable Interest
d) Contribution
Answer: c) Insurable Interest

Subrogation in insurance refers to:
a) The insurer’s right to seek reimbursement from third parties for payments made to the insured.
b) The insured’s right to claim compensation from the insurer.
c) The insurer’s refusal to pay the claim.
d) The insured’s right to refuse the insurance policy.
Answer: a) The insurer’s right to seek reimbursement from third parties for payments made to the insured.

What does the principle of indemnity state?
a) The insured should not suffer a financial loss greater than the amount of the insurance policy.
b) The insured should always receive more than the actual value of the loss.
c) The insurer should suffer the loss instead of the insured.
d) The insured should suffer a loss greater than the amount of the insurance policy.
Answer: a) The insured should not suffer a financial loss greater than the amount of the insurance policy.

Which of the following is not a method of loss assessment in insurance?
a) Loss Adjuster
b) Surveyor
c) Actuary
d) Underwriter
Answer: d) Underwriter

The role of a loss adjuster in insurance is to:
a) Determine the premium amount.
b) Assess the extent of the loss and negotiate settlement on behalf of the insurer.
c) Investigate fraudulent claims.
d) Assess the insurability of the risk.
Answer: b) Assess the extent of the loss and negotiate settlement on behalf of the insurer.

What does the principle of contribution state in insurance?
a) The insured can claim from multiple insurers for the same loss.
b) The insured cannot claim from multiple insurers for the same loss.
c) The insurer must contribute a fixed amount to every claim.
d) The insurer is not liable to pay for the loss.
Answer: b) The insured cannot claim from multiple insurers for the same loss.

Who is responsible for calculating insurance premiums based on risk assessment?
a) Actuary
b) Underwriter
c) Loss Adjuster
d) Surveyor
Answer: a) Actuary

Which principle of insurance aims to prevent the insured from making a profit from insurance claims?
a) Subrogation
b) Indemnity
c) Insurable Interest
d) Contribution
Answer: b) Indemnity

The principle of utmost good faith in insurance contracts requires:
a) Complete honesty from both the insurer and the insured.
b) Only the insurer to disclose all relevant information.
c) The insured to disclose all relevant information.
d) The insurer to conceal certain information from the insured.
Answer: c) The insured to disclose all relevant information.

What is insurable interest?
a) The interest one has in ensuring they have the lowest possible premiums.
b) The interest one has in making a profit from insurance claims.
c) The interest one has in the subject matter of insurance, which must be legally recognized and financial in nature.
d) The interest one has in avoiding insurance altogether.
Answer: c) The interest one has in the subject matter of insurance, which must be legally recognized and financial in nature.

Which principle of insurance allows the insured to recover only to the extent of the actual financial loss suffered?
a) Principle of Contribution
b) Principle of Subrogation
c) Principle of Utmost Good Faith
d) Principle of Indemnity
Answer: d) Principle of Indemnity

Loss adjusters play a crucial role in insurance claims by:
a) Investigating potential fraudulent claims.
b) Determining the premium amount for each policy.
c) Negotiating settlement amounts on behalf of the insured.
d) Assessing the extent of the loss and negotiating settlement on behalf of the insurer.
Answer: d) Assessing the extent of the loss and negotiating settlement on behalf of the insurer.

Which principle of insurance refers to the right of the insurer to take over any rights of recovery the insured might have against a third party after the insurer has paid the claim?
a) Indemnity
b) Subrogation
c) Insurable Interest
d) Contribution
Answer: b) Subrogation

The principle of indemnity aims to:
a) Ensure that the insured suffers a loss greater than the amount of the insurance policy.
b) Prevent the insured from making a profit from insurance claims.
c) Compensate the insured for the full value of the loss, regardless of the policy limit.
d) Allow the insurer to claim from multiple insurers for the same loss.
Answer: b) Prevent the insured from making a profit from insurance claims.

Loss assessment in insurance involves:
a) Estimating the future value of the insured property.
b) Determining the premium amount for the insurance policy.
c) Assessing the extent of the loss and its financial impact.
d) Investigating potential fraudulent claims.
Answer: c) Assessing the extent of the loss and its financial impact.

Which of the following is NOT a method of loss assessment in insurance?
a) Actuarial Analysis
b) Surveyor’s Report
c) Underwriting Review
d) Loss Adjuster’s Report
Answer: c) Underwriting Review

Who is responsible for calculating insurance premiums based on statistical analysis of risks?
a) Actuary
b) Underwriter
c) Loss Adjuster
d) Surveyor
Answer: a) Actuary

The principle of subrogation allows the insurer to:
a) Refuse to pay the claim.
b) Seek reimbursement from third parties for payments made to the insured.
c) Increase the premium after a claim is filed.
d) Deny coverage based on pre-existing conditions.
Answer: b) Seek reimbursement from third parties for payments made to the insured.

The principle of contribution in insurance ensures that:
a) The insured can claim from multiple insurers for the same loss.
b) The insured cannot claim from multiple insurers for the same loss.
c) The insurer must contribute a fixed amount to every claim.
d) The insurer is not liable to pay for the loss.
Answer: b) The insured cannot claim from multiple insurers for the same loss.

Loss assessment in insurance involves the evaluation of:
a) The insured’s income level.
b) The insured’s reputation.
c) The extent of the loss and its financial impact.
d) The insured’s personal preferences.
Answer: c) The extent of the loss and its financial impact.

The principle of indemnity aims to:
a) Ensure that the insured receives more than the actual value of the loss.
b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.
c) Allow the insurer to profit from insurance claims.
d) Shift the financial burden of the loss entirely onto the insurer.
Answer: b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.

What is the role of an actuary in insurance?
a) Investigating fraudulent claims.
b) Assessing the extent of the loss and negotiating settlement on behalf of the insurer.
c) Calculating insurance premiums based on statistical analysis of risks.
d) Determining the premium amount for each policy.
Answer: c) Calculating insurance premiums based on statistical analysis of risks.

In insurance, insurable interest means:
a) Any interest in the subject matter of insurance.
b) A financial interest in the subject matter of insurance.
c) An emotional attachment to the insured property.
d) The insured’s interest in ensuring they receive the highest possible settlement.
Answer: b) A financial interest in the subject matter of insurance.

Which principle of insurance ensures that the insured should have a financial interest in the subject matter of insurance?
a) Indemnity
b) Subrogation
c) Insurable Interest
d) Contribution
Answer: c) Insurable Interest

Loss assessment in insurance involves:
a) Estimating the future value of the insured property.
b) Determining the premium amount for the insurance policy.
c) Assessing the extent of the loss and its financial impact.
d) Investigating potential fraudulent claims.
Answer: c) Assessing the extent of the loss and its financial impact.

Which of the following is NOT a method of loss assessment in insurance?
a) Actuarial Analysis
b) Surveyor’s Report
c) Underwriting Review
d) Loss Adjuster’s Report
Answer: c) Underwriting Review

Who is responsible for calculating insurance premiums based on statistical analysis of risks?
a) Actuary
b) Underwriter
c) Loss Adjuster
d) Surveyor
Answer: a) Actuary

The principle of subrogation allows the insurer to:
a) Refuse to pay the claim.
b) Seek reimbursement from third parties for payments made to the insured.
c) Increase the premium after a claim is filed.
d) Deny coverage based on pre-existing conditions.
Answer: b) Seek reimbursement from third parties for payments made to the insured.

The principle of contribution in insurance ensures that:
a) The insured can claim from multiple insurers for the same loss.
b) The insured cannot claim from multiple insurers for the same loss.
c) The insurer must contribute a fixed amount to every claim.
d) The insurer is not liable to pay for the loss.
Answer: b) The insured cannot claim from multiple insurers for the same loss.

Loss assessment in insurance involves the evaluation of:
a) The insured’s income level.
b) The insured’s reputation.
c) The extent of the loss and its financial impact.
d) The insured’s personal preferences.
Answer: c) The extent of the loss and its financial impact.

The principle of indemnity aims to:
a) Ensure that the insured receives more than the actual value of the loss.
b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.
c) Allow the insurer to profit from insurance claims.
d) Shift the financial burden of the loss entirely onto the insurer.
Answer: b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.

What is the role of an actuary in insurance?
a) Investigating fraudulent claims.
b) Assessing the extent of the loss and negotiating settlement on behalf of the insurer.
c) Calculating insurance premiums based on statistical analysis of risks.
d) Determining the premium amount for each policy.
Answer: c) Calculating insurance premiums based on statistical analysis of risks.

In insurance, insurable interest means:
a) Any interest in the subject matter of insurance.
b) A financial interest in the subject matter of insurance.
c) An emotional attachment to the insured property.
d) The insured’s interest in ensuring they receive the highest possible settlement.
Answer: b) A financial interest in the subject matter of insurance.

Which principle of insurance ensures that the insured should have a financial interest in the subject matter of insurance?
a) Indemnity
b) Subrogation
c) Insurable Interest
d) Contribution
Answer: c) Insurable Interest

Loss assessment in insurance involves:
a) Estimating the future value of the insured property.
b) Determining the premium amount for the insurance policy.
c) Assessing the extent of the loss and its financial impact.
d) Investigating potential fraudulent claims.
Answer: c) Assessing the extent of the loss and its financial impact.

Which of the following is NOT a method of loss assessment in insurance?
a) Actuarial Analysis
b) Surveyor’s Report
c) Underwriting Review
d) Loss Adjuster’s Report
Answer: c) Underwriting Review

Who is responsible for calculating insurance premiums based on statistical analysis of risks?
a) Actuary
b) Underwriter
c) Loss Adjuster
d) Surveyor
Answer: a) Actuary

The principle of subrogation allows the insurer to:
a) Refuse to pay the claim.
b) Seek reimbursement from third parties for payments made to the insured.
c) Increase the premium after a claim is filed.
d) Deny coverage based on pre-existing conditions.
Answer: b) Seek reimbursement from third parties for payments made to the insured.

The principle of contribution in insurance ensures that:
a) The insured can claim from multiple insurers for the same loss.
b) The insured cannot claim from multiple insurers for the same loss.
c) The insurer must contribute a fixed amount to every claim.
d) The insurer is not liable to pay for the loss.
Answer: b) The insured cannot claim from multiple insurers for the same loss.

Loss assessment in insurance involves the evaluation of:
a) The insured’s income level.
b) The insured’s reputation.
c) The extent of the loss and its financial impact.
d) The insured’s personal preferences.
Answer: c) The extent of the loss and its financial impact.

The principle of indemnity aims to:
a) Ensure that the insured receives more than the actual value of the loss.
b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.
c) Allow the insurer to profit from insurance claims.
d) Shift the financial burden of the loss entirely onto the insurer.
Answer: b) Prevent the insured from suffering a financial loss greater than the amount of the insurance policy.

What is the role of an actuary in insurance?
a) Investigating fraudulent claims.
b) Assessing the extent of the loss and negotiating settlement on behalf of the insurer.
c) Calculating insurance premiums based on statistical analysis of risks.
d) Determining the premium amount for each policy.
Answer: c) Calculating insurance premiums based on statistical analysis of risks.

In insurance, insurable interest means:
a) Any interest in the subject matter of insurance.
b) A financial interest in the subject matter of insurance.
c) An emotional attachment to the insured property.
d) The insured’s interest in ensuring they receive the highest possible settlement.
Answer: b) A financial interest in the subject matter of insurance.

Which principle of insurance ensures that the insured should have a financial interest in the subject matter of insurance?
a) Indemnity
b) Subrogation
c) Insurable Interest
d) Contribution
Answer: c) Insurable Interest

Loss assessment in insurance involves:
a) Estimating the future value of the insured property.
b) Determining the premium amount for the insurance policy.
c) Assessing the extent of the loss and its financial impact.
d) Investigating potential fraudulent claims.
Answer: c) Assessing the extent of the loss and its financial impact.

Which of the following is NOT a method of loss assessment in insurance?
a) Actuarial Analysis
b) Surveyor’s Report
c) Underwriting Review
d) Loss Adjuster’s Report
Answer: c) Underwriting Review

Who is responsible for calculating insurance premiums based on statistical analysis of risks?
a) Actuary
b) Underwriter
c) Loss Adjuster
d) Surveyor
Answer: a) Actuary

The principle of subrogation allows the insurer to:
a) Refuse to pay the claim.
b) Seek reimbursement from third parties for payments made to the insured.
c) Increase the premium after a claim is filed.
d) Deny coverage based on pre-existing conditions.
Answer: b) Seek reimbursement from third parties for payments made to the insured.