Book 1 Study 1 Flashcards
Insurance
True or False : Indemnity is what you purchase when you contract for insurance.
True
True or False : A broker is an intermediary.
True
True or False : The law of large numbers allows an insurer to determine who will actually have a loss.
False.
True or False : Insurance is the pooling of many premiums to pay a few losses.
True.
True or False : Insurance premiums are a minor factor in the Canadian economy.
False.
True or False : Negligence is neglecting to do something a reasonable person would do.
True.
True or False : A liability risk can arise from a persons conduct.
True.
True or False : Spreading of risk is the secondary function of insurance.
False.
True or False : Risk is the certainty of loss.
False
True or False : Pure premium does not take inflation and profit into account.
True
True or False : Consideration and actual cash value are the same thing.
False
True or False : Frayed Carpet on stairs constitutes a physical hazard.
True
True or False : Only speculative risk may be insured.
False
True or False : Statistics of past losses form an important tool in the determination of loss.
True
True or False : In an insurance contract the insurer is the first party.
False
True or False : The availability of insurance has little effect on credit.
False
True or False : A fortuitous even is an accidental happening.
True
True or False : Hail is a peril.
True
True or False : The premium is the price of a unit of insurance.
False
True or False : The loss of a valuable piece of jewellery is an example of a personal risk.
False
True or False : The exclusions determine the coverage in all risk policies.
True
True or False : Moral hazard relates to the subject matter of insurance.
False
True or False : To assume risk means to keep it and bear the losses yourself.
True
True or False : Using tamperproof locks is one way of transferring risk.
False
True or False : The primary function of insurance is loss prevention activities.
False
