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Foundation insurance test > FIT > Flashcards

FIT Flashcards

1
Q 
When an insurer sells insurance over the internet, this is known as
A. an agency relationship.
B. a first loss policy.
C. dual insurance.
D. e-trading.
A

D. e-trading.

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2
Q 
Which type of intermediary normally transacts business in the Lloyd’s market?
A. Approved representatives.
B. Independent insurance intermediaries.
C. Lloyd’s agents.
D. Lloyd’s brokers.
A

D. Lloyd’s brokers.

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3
Q

What is the main advantage of an individual buying motor insurance directly from an insurer?
A. Different insurance products are promoted by the insurer.
B. A financial saving is possible as the insurer would not include commission in the premium.
C. Independent advice can be given by the insurer.
D. The insurer can be more flexible in the types of risks which can be covered.

A

B. A financial saving is possible as the insurer would not include commission in the premium.

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4
Q

What is the main function of an underwriter?
A. Making ultimate decisions as to whether a claim is covered by the policy wording.
B. Setting premiums and policy terms to build a profitable portfolio of business.
C. Undertaking detailed statistical analysis of claims figures and forecasting future loss trends.
D. Undertaking surveys of risks presented to the insurer.

A

B. Setting premiums and policy terms to build a profitable portfolio of business.

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5
Q

he main function of a loss adjuster is to
A. identify, evaluate and control an insurable risk.
B. fix the terms, conditions and scope of cover for a risk.
C. investigate and negotiate a claim on behalf of the insurer.
D. investigate and negotiate a claim on behalf of the insured.

A

C. investigate and negotiate a claim on behalf of the insurer.

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6
Q

Who is responsible for the regulatory conduct of an appointed representative?
A. The approved representative.
B. The Association of British Insurers.
C. The British Insurance Brokers’ Association.
D. The principal.

A

D. The principal.

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7
Q 
From where may an insured obtain free advice regarding the cover provided under his personal lines
insurance policy?
A. The Chartered Insurance Institute.
B. The Financial Conduct Authority.
C. The Financial Ombudsman Service.
D. The insurer’s telephone helpline.
A

D. The insurer’s telephone helpline.

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8
Q 
How is direct insurance transacted through e-trading?
A. Face to face.
B. Over the telephone.
C. Via a broker.
D. Via the internet.
A

D. Via the internet.

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9
Q 
Which type of risk can always be insured against?
A. A fundamental risk.
B. A non-financial risk.
C. A pure risk.
D. A speculative risk.
A

C. A pure risk.

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10
Q 
What term is given to the basic principle of insurance that the losses of the few are met by the contributions of
the many?
A. Pooling of risks.
B. Risk management.
C. Risk transfer mechanism.
D. Subrogation.
A

A. Pooling of risks.

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11
Q 
The primary function of insurance is to
A. act as a risk transfer mechanism.
B. minimise claims.
C. prevent losses from occurring.
D. reduce risk.
A

A. act as a risk transfer mechanism.

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12
Q 
A risk which arises from a cause outside the control of any one individual is known as a
A. fundamental risk.
B. particular risk.
C. pure risk.
D. speculative risk
A

A. fundamental risk.

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13
Q

What is the main benefit to a policyholder when purchasing an insurance policy?
A. His financial position is guaranteed to improve.
B. He receives commission to cover the expenses of purchasing the insurance policy.
C. He maintains his current financial position in the event of a loss.
D. His credit rating is enhanced.

A

C. He maintains his current financial position in the event of a loss.

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14
Q 
When an insurer transfers a portion of its risk to a third party in return for a premium, this is known as
A. co-insurance.
B. dual insurance.
C. reinsurance.
D. self insurance.
A

C. reinsurance.

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15
Q 
Motor insurance windscreen claims can be classed as
A. high frequency, high severity.
B. high frequency, low severity.
C. low frequency, high severity.
D. low frequency, low severity
A

B. high frequency, low severity.

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16
Q

What are the consequences of an insured’s deliberate non-disclosure of material facts becoming apparent
when a claim is made?
A. The insurer must pay the claim then cancel the policy.
B. The policy is voidable from inception at the insurer’s option.
C. The policy is voidable from inception at the policyholder’s option.
D. The insurer can only avoid the claim but must continue the policy

A

B. The policy is voidable from inception at the insurer’s option.

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17
Q

What forms the insured’s consideration for an insurance contract?
A. The acceptance of the policy terms and conditions.
B. The agreement to comply with any warranties imposed by the insurer.
C. The disclosure of material facts.
D. The payment of, or the promise to pay, the premium.

A

D. The payment of, or the promise to pay, the premium.

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18
Q 
Which insurance principle describes a policyholder’s duty to disclose material facts?
A. Contribution.
B. Indemnity.
C. Insurable interest.
D. Utmost good faith.
A

D. Utmost good faith.

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19
Q

After a car crashes into Paul’s house, his insurer pays to reinstate the damage and recovers its outlay from
the driver’s insurer. This recovery is an example of
A. arbitration.
B. indemnity.
C. ratification.
D. subrogation

A

D. subrogation

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20
Q

Underinsurance occurs when the
A. sum insured is a pre-agreed value.
B. sum insured is based on a first loss value.
C. value at risk is less than the sum insured.
D. value at risk is more than the sum insured.

A

D. value at risk is more than the sum insured.

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21
Q

Whilst assisting a client to complete a proposal form for a household insurance policy, a broker must explain
the customer’s duty to disclose
A. facts of law.
B. material facts and the consequences of non-disclosure.
C. material facts which lessen the risk.
D. spent convictions.

A

B. material facts and the consequences of non-disclosure.

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22
Q

The disclosure of all material facts enables an underwriter to
A. arrange adequate reinsurance.
B. automatically accept a proposal.
C. fully assess the level of risk.
D. guarantee the payment of future claims.

A

C. fully assess the level of risk.

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23
Q

Stock with a sum insured of £30,000 is insured under a commercial policy and is subject to average. A fire
completely destroys the stock, which has a replacement value of £40,000. What settlement figure will the
insurer pay?
A. £10,000
B. £22,500
C. £30,000
D. £40,000

A

C. £30,000

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24
Q

An insurance policy has a renewal date of 30 June. The insurer advises the insured of the renewal terms on
the 7 June, subject to confirmation of no material changes affecting the insured risk. The insured informs the
insurer on 14 June that he will renew and that there are no material changes. He pays the premium on 28
June. On what date did acceptance of this insurance contract take place?
A. 7 June.
B. 14 June.
C. 28 June.
D. 30 June.

A

B. 14 June.

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25
Q 
What type of agency relationship is created by an insurer agreeing to pay an intermediary a commission on all
insurance premium transactions?
A. Apparent authority.
B. Consent.
C. Necessity.
D. Ratification.
A

D. Ratification.

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26
Q

Why does a mortgage lender have an insurable interest in a borrower’s property?
A. The mortgage lender is always responsible for arranging buildings insurance on behalf of the borrower.
B. The mortgage lender always suffers a financial loss if the property sustains damage.
C. The mortgage lender has a financial interest in the property in relation to the amount of the loan.
D. The mortgage lender is granted insurable interest by the Financial Conduct Authority

A

C. The mortgage lender has a financial interest in the property in relation to the amount of the loan.

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27
Q

A comprehensive motor insurance policy incepts on 25 January. On 24 April the policyholder is involved in an
accident and the car is declared unrepairable. The insurer settles the claim on 15 June. When must
insurable interest exist?
A. 25 January only.
B. 24 April only.
C. 25 January to 24 April only.
D. 25 January to 15 June.

A

C. 25 January to 24 April only.

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28
Q

A shopkeeper has insured his stock for a total value of £500,000, but it is worth £475,000 at the time that it is
totally destroyed. Which principle of insurance restricts the insurer’s payment to £475,000?
A. Average.
B. Contribution.
C. Indemnity.
D. Subrogation.

A

C. Indemnity.

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29
Q

Why is the sum insured on valuable paintings normally based on an agreed value?
A. The true financial value of the paintings is difficult to establish so a value is fixed at inception.
B. To allow for an increase in the financial value of the paintings after inception.
C. To ensure that the settlement figure allows for depreciation.
D. To ensure that the insured will be in the same financial position after a loss as he was in immediately
before its occurrence.

A

A. The true financial value of the paintings is difficult to establish so a value is fixed at inception.

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30
Q

A storm causes a tree to fall on power lines which spark and cause fire damage to an adjacent building. The
building is subsequently boarded up. Thieves then steal the lead from the roof of the building. What is the
proximate cause of the loss of the lead?
A. Falling tree.
B. Fire.
C. Storm.
D. Theft.

A

D. Theft.

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31
Q

A holidaymaker has a camera stolen, which was valued at £350. He has a household contents insurance
policy providing cover for £5,000 contents anywhere worldwide. He also has a travel insurance policy
providing cover for £2,000 personal effects anywhere worldwide. How much, if anything, will each insurer pay
to settle the loss?
A. The household insurer pays nothing and the travel insurer pays £350.
B. The household insurer pays £100 and the travel insurer pays £250.
C. The household insurer pays £175 and the travel insurer pays £175.
D. The household insurer pays £250 and the travel insurer pays £100.

A

D. The household insurer pays £250 and the travel insurer pays £100.

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32
Q

Dave makes a claim for a broken patio window under his household buildings and contents insurance. It is
discovered that he deliberately failed to tell his insurer about a recent conviction for shoplifting when he
completed the proposal form. Legally, what action is his insurer entitled to take regarding the claim?
A. It will be paid, but the policy will be cancelled from the renewal date.
B. It will be refused and the policy cancelled from inception.
C. It will be settled in full.
D. It will be settled and an additional premium charged.

A

B. It will be refused and the policy cancelled from inception.

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33
Q 
What document do insurers often use to obtain material facts?
A. Key facts document.
B. Proposal form.
C. Renewal notice.
D. Statement of demands and needs.
A

B. Proposal form.

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34
Q

In order for an insurance policy to grant valid cover, the insured must always
A. complete a proposal form.
B. have a valid certificate of insurance.
C. pay Insurance Premium Tax.
D. promise to pay the premium.

A

D. promise to pay the premium.

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35
Q 
The cost of most commercial and personal insurances is made up of the premium plus
A. Insurance Premium Tax.
B. reinsurance premiums.
C. risk management fees.
D. uninsured loss recovery costs.
A

A. Insurance Premium Tax

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36
Q 
What rate of Insurance Premium Tax, if any, would be payable on the addition of a motor vehicle to an
existing motor policy?
A. None.
B. 5%
C. 6%
D. 20%
A

C. 6%

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37
Q

What type of moral hazard would particularly affect an underwriter’s decision regarding a quotation for theft
insurance at a finished goods warehouse?
A. Confirmation that the building is of non-combustible construction.
B. Existence of a security alarm on the premises.
C. The proposer having a fraud conviction.
D. The proposer having a speeding conviction.

A

C. The proposer having a fraud conviction.

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38
Q

An insured has obtained property insurance on his retail unit for the past five years with the same insurer and
no claims have occurred. The Environment Agency updates its flood information and includes the property
within a river’s flood risk area. At renewal the insurer will most likely consider this information as
A. an increased moral hazard only.
B. an increased physical hazard only.
C. an increased physical and moral hazard.
D. having no effect on the physical or moral hazard.

A

B. an increased physical hazard only.

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39
Q

A plumber requests a public liability insurance quote for his business with an inception date of 31 May. An
insurer provides a quote on 20 May, valid for 14 days. On 28 May the plumber advises the insurer that he
would like to take up the quotation and that he has just informed his current insurer of a loss that has
occurred. What action is the insurer most likely to take?
A. Confirm insurance coverage for the quoted insurance premium but impose additional policy exclusions.
B. Decline to provide insurance coverage.
C. Provide an alternative quotation taking into account the loss that has occurred.
D. Unconditionally confirm insurance coverage on the quoted terms.

A

C. Provide an alternative quotation taking into account the loss that has occurred

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40
Q 
Which document forms the basis of the contract?
A. Certificate of insurance.
B. Demands and needs statement.
C. Proposal form.
D. Schedule of insurance.
A

C. Proposal form.

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41
Q

In what circumstances can a motor insurance cover note be backdated?
A. At renewal of the policy during the days of grace.
B. For a new vehicle on an existing policy.
C. To provide evidence of valid cover to the police.
D. In no circumstances.

A

D. In no circumstances.

42
Q

. A household insurer will usually obtain material facts from a proposer by
A. asking the proposer specific questions via the telephone or internet.
B. completing a demands and needs statement with the proposer.
C. obtaining a surveyor’s valuation report.
D. requesting information from the previous insurer

A

A. asking the proposer specific questions via the telephone or internet.

43
Q

In the event of a valid claim, the average condition operates when
A. more than one insurance policy covers the same risk.
B. the sum insured exceeds the market value.
C. the sum insured is less than the actual value.
D. a first loss insurance policy is in operation.

A

C. the sum insured is less than the actual value.

44
Q

The contribution condition in an insurance policy always modifies the common law position by
A. allowing the insurer to recover its loss from a third party.
B. limiting each insurer’s liability to its share of the loss.
C. making each insurer liable for 50% of the loss.
D. making each insurer liable for the full extent of the loss

A

B. limiting each insurer’s liability to its share of the loss.

45
Q

If an express warranty is written into a contract of insurance, what does this usually mean?
A. It gives notice extending cover beyond that provided under a standard insurance policy.
B. It gives notice guaranteeing a minimum level of service under the insurance policy.
C. It is a term detailing the maximum time in which an insurer must respond to a valid claim.
D. It is a term which an insured must strictly comply with.

A

D. It is a term which an insured must strictly comply with

46
Q 
A condition precedent to liability is most likely to be stated within which clause of an insurance policy?
A. Average.
B. Claims.
C. Operative.
D. Subrogation.
A

B. Claims.

47
Q 
Which section of the insurance policy is always specific to the insured?
A. Conditions.
B. Coverage.
C. Exclusions.
D. Schedule
A

D. Schedule

48
Q 
Daniel has a policy which incorporates a franchise of £100. If he has a valid claim of £300, how much, if
anything, will his insurer pay?
A. Nil.
B. £100
C. £200
D. £300
A

D. £300

49
Q 
Which document must a household insurer issue to the insured in good time prior to the renewal of the
policy?
A. Certificate of insurance.
B. Declaration.
C. Proposal form.
D. Renewal notice.
A

D. Renewal notice.

50
Q 
On cancellation of a motor insurance policy, what document must be returned to the insurer?
A. Certificate of insurance.
B. Insurance policy.
C. Policy schedule.
D. Proposal form.
A

A. Certificate of insurance.

51
Q 
The Claims and Underwriting Exchange primarily provides a database relating to
A. commercial property claims.
B. location exposure factors.
C. personal lines claims.
D. premium rating factors.
A

C. personal lines claims.

52
Q

Steve submits a claim for fire damage to finished goods in his warehouse. The settlement he receives is
considerably less than the amount claimed. What is the most likely reason for this?
A. Average has been applied as there was underinsurance.
B. Contribution has been applied.
C. An exclusion has been applied.
D. The policy is subject to a franchise.

A

A. Average has been applied as there was underinsurance.

53
Q
  1. Lorraine has a standard household contents insurance policy with cover on a new for old basis. Her
    recently-purchased television has been stolen. How is the insurer most likely to settle her claim?
    A. Cash payment based on the original purchase price.
    B. Cash payment based on the current purchase price.
    C. Replacement with a new television from the insurer’s preferred supplier.
    D. Replacement with a television of a similar age.
A

C. Replacement with a new television from the insurer’s preferred supplier.

54
Q

. A property insurance contract is void from inception if there was a
A. breach of good faith.
B. breach of a policy condition precedent to liability.
C. breach of warranty.
D. lack of insurable interest

A

D. lack of insurable interest

55
Q

An insurance policy states that an insured should notify his insurer as soon as possible after a loss has
occurred. This is known as
A. a condition precedent to the contract.
B. an express duty.
C. an implied duty.
D. a warranty

A

B. an express duty.

56
Q 
56. What type of insurance claim will always be settled by payment to an injured party who is NOT the insured?
A. Dental insurance.
B. Employers’ liability insurance.
C. Personal accident insurance.
D. Travel insurance.
A

B. Employers’ liability insurance.

57
Q 
57. What effect do fraudulent claims have on an insurer?
A. They reduce claims reserves.
B. They reduce claims settlements.
C. They reduce loss adjusters’ expenses.
D. They reduce profits.
A

D. They reduce profits.

58
Q
  1. When an insurance policy is declared void, it means that it is
    A. binding until one of the parties decides to declare that it is not valid.
    B. only binding on the insured.
    C. only binding on the insurer.
    D. not binding on either party.
A

D. not binding on either party.

59
Q 
A household claim is only valid if, during the period of insurance, the loss
A. is discovered.
B. is reported.
C. is settled.
D. occurs.
A

D. occurs.

60
Q 
For what type of liability claim is a medical report always required?
A. Employers’ liability.
B. Products liability.
C. Professional indemnity.
D. Public liability
A

A. Employers’ liability

61
Q

A pedestrian is hit by a car and the driver is held responsible. The driver’s insurer acknowledges that the
pedestrian has a valid claim, but before settlement for his injuries can be finalised, the insurer goes into
liquidation. Who will reimburse the pedestrian for his injuries?
A. Association of British Insurers.
B. Financial Ombudsman Service.
C. Financial Services Compensation Scheme.
D. Motor Insurers’ Bureau.

A

C. Financial Services Compensation Scheme.

62
Q

Under the Data Protection Act 1998, personal data is defined as information that relates to
A. a living individual who can be identified from that information only.
B. a living individual or a corporation that can be identified from that information only.
C. an individual, living or deceased, who can be identified from that information only.
D. an individual, living or deceased, or a corporation that can be identified from that information.

A

A. a living individual who can be identified from that information only.

63
Q

The Prudential Regulation Authority is
A. a rule book that applies specifically to the sales and administration process for general insurance.
B. a non-statutory body representing the interests of insurance brokers.
C. responsible for the regulation and supervision of financial institutions in the UK.
D. the principal body representing insurers carrying out life and non-life business in the UK.

A

C. responsible for the regulation and supervision of financial institutions in the UK.

64
Q

What is the usual effect on an insurer of having an effective claims complaints-handling procedure in place?
A. It increases the number of outstanding claims.
B. It increases total claims costs.
C. It reduces claims administration expenses.
D. It reduces the amount of paid claims.

A

C. It reduces claims administration expenses

65
Q 
It is a regulatory requirement that an insurer handles complaints consistently, fairly and
A. immediately.
B. promptly.
C. within 7 days of receipt.
D. within 30 days of receipt.
A

B. promptly.

66
Q

The owner of a new ladies’ fashion boutique intends to have three friends serving customers. What insurance
must be in place when the boutique opens?
A. All risks cover on stock.
B. Employers’ liability.
C. Loss of profits.
D. Public liability

A

B. Employers’ liability.

67
Q

What is the primary function of the Association of British Insurers?
A. To maintain confidence in the UK financial system ensuring financial stability and protection for consumers.
B. To promote high standards of integrity, technical competence and business capability in the financial
services profession.
C. To represent and protect the best interests of insurance intermediary firms and members.
D. To act as the voice of the UK’s insurance, investment and long-term savings industry.

A

D. To act as the voice of the UK’s insurance, investment and long-term savings industry.

68
Q

What insurance must a solicitor have in force to practise?
A. Fire and special perils on office contents.
B. Legal expenses.
C. Professional indemnity.
D. Public liability

A

C. Professional indemnity.

69
Q

. How many days cooling-off period do the Insurance: Conduct of Business sourcebook (ICOBS) require to be
provided under a household insurance policy?
A. 7 days.
B. 14 days.
C. 28 days.
D. 30 days.

A

B. 14 days.

70
Q

An insurer receives duplicate premium payments from a new insured followed shortly by a request for the
overpayment to be returned. The accounts clerk is suspicious of the duplicate payment. Whom should he
inform of his suspicion?
A. The compliance officer.
B. The finance director.
C. The Money Laundering Reporting Officer.
D. The underwriter

A

C. The Money Laundering Reporting Officer.

71
Q

What insurance cover must be effected by an insurance intermediary with a number of offices?
A. Employers’ liability insurance only.
B. Employers’ liability and professional indemnity insurance.
C. Employers’ liability and property insurance.
D. Employers’ liability and public liability insurance.

A

B. Employers’ liability and professional indemnity insurance.

72
Q

The Financial Ombudsman Service will only become involved with insurance disputes when
A. an intermediary has not arranged the insurance policy.
B. the insured is a consumer or small commercial company.
C. the insured is a public limited company.
D. the insurance policy is still current

A

B. the insured is a consumer or small commercial company.

73
Q 
An insurer must protect information held on individual policyholders because it is a requirement of the
A. Association of British Insurers.
B. Data Protection Act 1998.
C. Financial Conduct Authority.
D. Money Laundering Regulations 2007.
A

B. Data Protection Act 1998.

74
Q

A household insurer becomes insolvent. What percentage of each valid unpaid claim will the Financial
Services Compensation Scheme pay to policyholders?
A. 75%
B. 80%
C. 90%
D. 100%

A

C. 90%

75
Q 
Under the Data Protection Act 1998 the definition of sensitive data includes
A. address.
B. name.
C. occupation.
D. political beliefs.
A

D. political beliefs

76
Q 
Which type of motor insurance cover provides indemnity for accidental damage to the insured’s own vehicle?
A. Road Traffic Act only.
B. Third party only.
C. Third party, fire and theft only.
D. Comprehensive
A

D. Comprehensive

77
Q

The Road Traffic Act 1988, as amended by the Motor Vehicles (Compulsory Insurance) Regulations 2007,
requires that the minimum limit of indemnity for loss or damage to property belonging to a third party should
be
A. £100,000
B. £1,000,000
C. £10,000,000
D. an unlimited amount.

A

B. £1,000,000

78
Q

The primary purpose of a private medical insurance policy is to provide
A. a weekly benefit to the insured following incapacity through illness or injury.
B. a lump-sum benefit to the insured in the event of death or loss of limb.
C. payment for medical treatment received outside of National Health Service (NHS) facilities.
D. payment for nursing home facilities in retirement or old age.

A

C. payment for medical treatment received outside of National Health Service (NHS) facilities

79
Q

What is the usual minimum number of days that a policyholder must be off work before a benefit is payable
under a mortgage payment protection insurance policy?
A. 30 days.
B. 60 days.
C. 90 days.
D. 120 day

A

B. 60 days.

80
Q

Under a stand-alone legal expenses insurance policy, what are the usual limits applied to the overall cover
and the claim amounts?
A. Overall cover is unlimited, but there is a limit per claim.
B. Overall cover is unlimited and there is no limit per claim.
C. Overall cover is limited and there is a limit per claim.
D. Overall cover is limited, but each claim is unlimited until the overall cover limit is reached.

A

A. Overall cover is unlimited, but there is a limit per claim.

81
Q 
Under a household insurance policy, the definition of a small craft is a vessel up to a maximum length of
A. 20 feet.
B. 23 feet.
C. 27 feet.
D. 30 feet.
A

B. 23 feet.

82
Q 
Most insurers will cover damage to a caravan and its contents as an optional extension under which main
class of insurance?
A. Extended warranty insurance.
B. Household insurance.
C. Motor insurance.
D. Travel insurance.
A

B. Household insurance.

83
Q

. How are claims paid under a dental cash plan?
A. A cash payment for dental treatment in accordance with a scale of benefits.
B. A cash payment in full for all dental treatment.
C. A cash payment for all dental treatment once a claim exceeds a fixed monetary amount.
D. A deduction of a fixed monetary amount from cash payments for all dental treatment.

A

A. A cash payment for dental treatment in accordance with a scale of benefits.

84
Q

Under a new mortgage payment protection insurance policy, what minimum cover must be offered?
A. Accident cover only.
B. Accident and sickness cover only.
C. Accident, sickness and unemployment cover only.
D. Accident, sickness, critical illness and unemployment cover.

A

C. Accident, sickness and unemployment cover only

85
Q

. What does an extended warranty insurance policy provide cover for?
A. Breakdown of the insured appliance due to an electrical power cut.
B. Fire damage to the insured appliance.
C. Mechanical and electrical breakdown of the insured appliance.
D. Theft of the insured appliance.

A

C. Mechanical and electrical breakdown of the insured appliance

86
Q 
The age limits for personal accident cover are generally
A. 16 to 60 years.
B. 16 to 70 years.
C. 18 to 60 years.
D. 18 to 70 years.
A

B. 16 to 70 years.

87
Q 
Extended warranty insurance is usually purchased when what type of product is sold?
A. Carpets.
B. Electrical goods.
C. Furniture.
D. Jewellery.
A

B. Electrical goods.

88
Q 
Under a travel insurance policy, what is the usual range of amounts for the limit of indemnity for permanent
total disablement?
A. £10,000 to £50,000.
B. £50,000 to £100,000.
C. £100,000 to £250,000.
D. £250,000 to £500,000.
A

A. £10,000 to £50,000.

89
Q

What cover, if any, is usually provided under a comprehensive private motor insurance policy in respect of a
caravan whilst it is attached to the insured vehicle?
A. None.
B. Third party only.
C. Third party, fire and theft only.
D. Comprehensive.

A

B. Third party only.

90
Q

A travel insurance policy will indemnify the insured in the event of
A. cancellation due to childbirth.
B. cancellation of the insured’s flight.
C. a change in mind on whether to travel.
D. a delay caused by industrial action advised at the time of the booking.

A

B. cancellation of the insured’s flight.

91
Q

In what way does a travel insurance policy for a holiday in the UK differ from a travel insurance policy for a
holiday in Europe?
A. Loss of valuables must be reported to the police as soon as possible.
B. A lower sum insured for medical expenses.
C. No cover for failure of a tour organiser.
D. No cover for holiday cancellation due to jury service.

A

B. A lower sum insured for medical expenses.

92
Q

A policyholder puts his foot through the ceiling whilst he is in his loft. Under which section of his home
insurance policy will the claim be covered?
A. Accidental damage to buildings.
B. Accidental damage to contents.
C. Occupier’s liability.
D. Owner’s liability.

A

A. Accidental damage to buildings.

93
Q 
How much will a household insurer normally deduct from a subsidence claim in respect of the policy excess?
A. £100
B. £250
C. £500
D. £1,000
A

D. £1,000

94
Q 
Under a business interruption insurance policy, the sum insured is usually the
A. gross profit.
B. net profit only.
C. payroll only.
D. turnover.
A

A. gross profit.

95
Q

Which type of insurance policy might be extended to include a third party contractor?
A. A commercial vehicle insurance policy.
B. A household contents insurance policy.
C. A personal accident insurance policy.
D. A public liability insurance policy

A

D. A public liability insurance policy

96
Q

Where access is NOT available to an electronic version of an employers’ liability insurance certificate, where
must a certificate be displayed?
A. At the insured’s head office only.
B. At the insured’s largest business premises only.
C. At the insured’s premises with the largest number of employees only.
D. At each of the premises of the insured’s business.

A

D. At each of the premises of the insured’s business.

97
Q

The minimum number of vehicles that would be classed as a fleet for insurance rating purposes is
determined by
A. the Driver and Vehicle Licensing Agency.
B. each individual insurer.
C. the Financial Conduct Authority.
D. the Motor Insurers’ Bureau.

A

B. each individual insurer

98
Q

Products liability insurance covers an insured against legal liability for
A. damage to a customer’s property caused by the insured.
B. damage to an employee’s property whilst on its premises.
C. injury or property damage arising from goods that it manufactures.
D. recalling defective products that it has manufactured.

A

C. injury or property damage arising from goods that it manufactures.

99
Q

Dorothy is being sued by a customer who was injured in an accident in her shop. Dorothy’s defence costs
and any damages will be covered by her
A. business interruption insurance.
B. personal accident and sickness insurance.
C. professional indemnity insurance.
D. public liability insurance.

A

D. public liability insurance

100
Q

A fully-loaded lorry, which is insured comprehensively, is involved in an accident with another vehicle and the
lorry’s insurer accepts that the lorry driver was responsible for the accident. However, the insurer would NOT
be liable for
A. damage to the lorry.
B. damage to the goods that the lorry was transporting.
C. injuries to a passenger in the third party vehicle.
D. injuries to the lorry driver.

A

B. damage to the goods that the lorry was transporting

Foundation insurance test (2 decks)

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