General Insurance Questions And Answers

Question 1

What is used to divide an insurer's loss ratio?

Accepted Answer

Underwriting losses by total premiums

Answer

Premiums by underwriting losses

Answer

Operating expenses by total premiums

Answer

Premiums by combined losses and expenses

Question 2

Which of the following perils is excluded from a commercial property coverage component that has the basic causes of loss form attached?

Accepted Answer

Volcanic eruption

Answer

Explosion

Answer

Sprinkler leakage

Answer

Windstorm

Question 3

In terms of law, one party's actions could have the effect of waiving a recognized right. Which of the following has the party generated when this happens?

Accepted Answer

Waiver

Answer

Warranty

Answer

Unilateral contract

Answer

Representation

Question 4

How long will the time for reporting claims under the policy be prolonged if general liability "claims-made" coverage is renewed by "occurrence" coverage and the insured purchases a supplemental extended reporting period (ERP)?

Accepted Answer

Indefinitely

Answer

2 months

Answer

7 years

Answer

2 years

Question 5

Which of the following describes the policy territory under the majority of property insurance policies?

Accepted Answer

The United States, its territories and possessions, and Canada

Answer

All of North America and Europe

Answer

Only the United States

Answer

The United States, Canada, and Mexico

Question 6

What kind of marketing system allows agents or agencies to operate independently while agreeing to exclusively promote one insurance provider?

Accepted Answer

Exclusive of the captive agency system

Answer

Direct response system

Answer

Independent agency system

Answer

Direct writer system

Question 7

A personal auto policy will pay transportation costs at the rate of $20 per day up to how much in the event of a physical damage loss that renders a covered auto unusable for a period of time?

Accepted Answer

A maximum payment of $600

Answer

A maximum payment of $460

Answer

A maximum payment of $740

Answer

A maximum payment of $300