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Insurance & Risk Management Basics Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Causation is made up of which of the following elements?

Question 2 2. How does cause-in-fact causation differ from proximate cause?

Question 3 3. Which type of causation is harder to prove?

Question 4 4. Which of the following describes proximate cause?

Question 5 5. What is the difference between general liability insurance and product liability insurance?

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Question 6 6. Companies get Key Person Insurance to cover against _____.

Question 7 7. A tornado swept through a city making it difficult for a small business to earn money for some time. What kind of insurance would help to minimize the loss of income?

Question 8 8. Which one of the following types of insurance is usually required by law?

Question 9 9. An insurance company pays your auto accident claim and then turns around and sues the other driver for negligence in your name. The company wins an award and keeps the money. This is an illustration of which of the following?

Question 10 10. The proposition that a prediction based upon a sample of 10,000 occurrences is more accurate than a prediction based upon 100 occurrences is an illustration of the _____.

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Question 11 11. How is the Indemnity principle different from the Subrogation rights?

Question 12 12. How does insurance allow a person or business to manage risk?

Question 13 13. Which of the following people is automatically assumed to have an insurable interest on a life insurance policy?

Question 14 14. Which of the following is an exception to the law that requires permission first be obtained before purchasing a life insurance policy on someone else?

Question 15 15. Which of the following is TRUE of a life insurance policy where there is no insurable interest?

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Question 16 16. Which of the following is TRUE of a creditor's insurable interest in someone who owes him money?

Question 17 17. If you have an accident in an old car, you will not recieve enough compensation to buy a more expensive newer car. What concept in insurance does this demonstrate?

Question 18 18. What is the main benefit of reinsurance?

Question 19 19. What happens if a person has two insurance policies for a car but the wording of the clauses about double insurance is unclear?

Question 20 20. Who is the cedant?

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Question 21 21. Zuk company Ltd. decides to launch a brand new type of bicycle called the Zukbike. The company accepts this risk and is prepared to pay for the losses that may occur. Which type of risk management approach is being used by the company?

Question 22 22. How is risk related to insurance?

Question 23 23. Which of the following is NOT a step in the risk management process?

Question 24 24. Which of the following management decisions involves risk reduction?

Question 25 25. Which type of warranty is written into the contract?

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Question 26 26. In insurance, what is a representation?

Question 27 27. What are warranties?

Question 28 28. The doctrine of utmost good faith is _____.

Question 29 29. Which of the following tests is used to determine proximate cause?

Question 30 30. Which of the following statements is the best explanation of how insurance allows a company to manage risk?

Insurance & Risk Management Basics Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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