Insurance Principles and Coverages Flashcards
6 cards from real TRIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Insurance Principles and Coverages flashcards as text
What is the principle of indemnity in insurance?
Answer: To restore the insured to their pre-loss position
The principle of indemnity ensures that the insured is restored to their original financial position without profit from a loss.
Which type of insurance covers bodily injury and property damage caused by a vehicle?
Answer: Auto liability insurance
Auto liability insurance protects against claims for bodily injury or property damage resulting from vehicle operation.
What is subrogation in the context of insurance?
Answer: Insurer takes legal action against a third party
Subrogation allows insurers to recover costs from a third party that caused the insured's loss after a claim has been paid.
Which insurance principle requires full disclosure of all material facts?
Answer: Utmost good faith
Utmost good faith is the principle that both parties must act honestly and disclose relevant information when entering an insurance contract.
What is typically covered under motor truck cargo insurance?
Answer: Loss or damage to transported goods
Motor truck cargo insurance provides protection for goods being transported in case of theft, damage, or loss.
What is a deductible in an insurance policy?
Answer: The out-of-pocket amount before coverage
A deductible is the amount the policyholder must pay out-of-pocket before insurance coverage begins.