General Insurance Flashcards
7 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 General Insurance flashcards as text
What does 'umbrella insurance' primarily provide?
Answer: Excess liability coverage beyond the limits of underlying policies
Umbrella insurance provides additional liability coverage that kicks in after the limits of an underlying policy (such as auto or homeowners) are exhausted.
What is a 'binder' in insurance?
Answer: A temporary agreement providing insurance coverage while the formal policy is being issued
A binder is a short-term, temporary insurance agreement that provides coverage while the insurer processes and issues the permanent policy.
Which of the following describes a 'named insured' on a policy?
Answer: The person or entity specifically identified in the policy as the policyholder with full rights
The named insured is the primary person or entity identified in the declarations page who holds the policy and has the most rights under it.
What is the purpose of a 'grace period' in insurance?
Answer: To give the insured extra time to pay an overdue premium without losing coverage
A grace period is a set number of days after a premium due date during which the policy remains in force even if the premium has not yet been paid.
Which of the following would be considered a 'hazard' rather than a 'peril'?
Answer: Icy road conditions that increase the likelihood of an accident
A hazard is a condition that increases the chance or severity of a loss, while a peril is the actual cause of the loss.
An 'endorsement' on an insurance policy is best described as:
Answer: An amendment or rider that modifies the terms of the original policy
An endorsement (also called a rider) is a written modification that adds, removes, or changes coverage in the original policy.
What is 'replacement cost' coverage in property insurance?
Answer: The cost to replace damaged property with new property of like kind and quality without deducting depreciation
Replacement cost coverage pays to replace damaged property with new equivalent property, without subtracting for age or depreciation.