Geico Assessment Test Insurance Concepts 2 — Questions and Answers
Question 1: What is a declarations page?
- A political document
- The page of an insurance policy summarizing key information including coverage, limits, deductibles, and premiums (Correct answer)
- A claim form
- A cancellation notice
Correct answer: The page of an insurance policy summarizing key information including coverage, limits, deductibles, and premiums
The declarations page (dec page) is the summary page of a policy containing all critical information at a glance: who, what, when, how much.
Question 2: What does 'exclusion' mean in an insurance policy?
- An extra benefit
- A specific condition, event, or circumstance that the policy does not cover (Correct answer)
- A type of endorsement
- A premium discount
Correct answer: A specific condition, event, or circumstance that the policy does not cover
Exclusions define what the policy will not pay for. Common exclusions include intentional acts, wear and tear, and war.
Question 3: What is a grace period in insurance?
- A church ceremony
- A time window after the premium due date during which the policy remains in force even if payment has not been received (Correct answer)
- A discount period
- A claim processing time
Correct answer: A time window after the premium due date during which the policy remains in force even if payment has not been received
Grace periods (typically 10-30 days) prevent immediate policy cancellation for late payment, giving policyholders time to make their payment.
Question 4: What is the principle of indemnity?
- Making a profit from insurance
- Insurance should restore the insured to the same financial position as before the loss — no better, no worse (Correct answer)
- Getting double payment
- Insurance for maximum value
Correct answer: Insurance should restore the insured to the same financial position as before the loss — no better, no worse
The principle of indemnity means insurance compensates for actual loss but does not allow the insured to profit from a claim.
Question 5: What is PIP (Personal Injury Protection)?
- A type of deductible
- Coverage that pays medical expenses and lost wages for you and passengers regardless of fault (Correct answer)
- A type of liability
- Pedestrian insurance
Correct answer: Coverage that pays medical expenses and lost wages for you and passengers regardless of fault
PIP (no-fault insurance) covers medical costs, lost wages, and other expenses for you and your passengers regardless of who caused the accident.
Question 6: What is gap insurance?
- Insurance for parking garages
- Coverage that pays the difference between what you owe on a vehicle loan and the vehicle's actual cash value if totaled (Correct answer)
- A type of health insurance
- Coverage for gaps in fences
Correct answer: Coverage that pays the difference between what you owe on a vehicle loan and the vehicle's actual cash value if totaled
If your car is totaled and you owe more than it is worth, gap insurance covers the 'gap' between the ACV payout and your loan balance.
Geico Assessment Test Insurance Concepts 2
What is a declarations page?