Question 1

The purpose of a coordination-of-benefits provision in group health insurance plans is to

Accepted Answer

A) determine which plan pays first if more than one plan covers a loss. 
B) determine which health care provider an insured may use for his or her care. 
C) determine if the calendar-year deductible has been satisfied by the insured. 
D) determine if the employee is eligible for coverage under the group health plan. 
A) determine which plan pays first if more than one plan covers a loss. 
B) determine which health care provider an insured may use for his or her care. 
C) determine if the calendar-year deductible has been satisfied by the insured. 
D) determine if the employee is eligible for coverage under the group health plan.

Question 2

The deductible used for automobile collision losses is an example of a(n)

Accepted Answer

A) calendar year deductible. 
B) elimination period. 
C) straight deductible. 
D) aggregate deductible. 
A) calendar year deductible. 
B) elimination period. 
C) straight deductible. 
D) aggregate deductible.

Question 3

Exclusions are used in insurance policies for all of the following reasons EXCEPT

Accepted Answer

A) to reduce moral hazard. 
B) to waive policy conditions. 
C) to eliminate coverage for uninsurable perils. 
D) to eliminate coverage not needed by typical insureds. 
A) to reduce moral hazard. 
B) to waive policy conditions. 
C) to eliminate coverage for uninsurable perils. 
D) to eliminate coverage not needed by typical insureds.

Question 4

Jane purchased a $50,000 liability insurance policy from Insurer A.Fearing that she did not have enough liability insurance,she purchased an additional $100,000 of liability coverage from Insurer B.As a result of a negligent act,Jane was ordered to pay $75,000 in damages.Assuming the coverage from Insurer A is primary and the coverage from Insurer B is excess,how will this claim be settled?

Accepted Answer

A) Insurer A will pay $50,000 and Insurer B will pay $25,000. 
B) Insurer A will pay $37,500 and Insurer B will pay $37,500. 
C) Insurer A will pay $25,000 and Insurer B will pay $50,000. 
D) Insurer A will pay nothing and Insurer B will pay $75,000. 
A) Insurer A will pay $50,000 and Insurer B will pay $25,000. 
B) Insurer A will pay $37,500 and Insurer B will pay $37,500. 
C) Insurer A will pay $25,000 and Insurer B will pay $50,000. 
D) Insurer A will pay nothing and Insurer B will pay $75,000.

Question 5

Which of the following statements about problems arising from the use of a coinsurance clause is (are)true?
I.The amount of insurance should be periodically evaluated to avoid a coinsurance penalty because of inflation.
II.An agreed value coverage option is one method used to solve the problem of values that fluctuate throughout the policy term.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 6

That part of a property and liability insurance contract that contains information about the property or activity to be insured is called the

Accepted Answer

A) declarations. 
B) insuring agreement. 
C) exclusions. 
D) conditions. 
A) declarations. 
B) insuring agreement. 
C) exclusions. 
D) conditions.

Question 7

Janet hit a wall causing a large dent in the fender of her car.She was busy at work and delayed reporting the damage to her insurer for 9 months.When she finally reported the claim,her insurer denied payment,stating,"Although such a loss is usually covered,you are required under the terms of the contract to provide prompt notification in case of loss." The prompt notification requirement is an example of a(n)

Accepted Answer

A) declaration. 
B) definition. 
C) insuring agreement. 
D) condition. 
A) declaration. 
B) definition. 
C) insuring agreement. 
D) condition.

Question 8

Jill's property insurance policy requires her to promptly notify the insurer if a loss occurs and to cooperate with the insurer in settling the claim.If Jill does not provide prompt notification or cooperate with the insurer settling the claim,the insurer can deny payment.These qualifications on the insurer's promise to perform are called

Accepted Answer

A) endorsements. 
B) binders. 
C) conditions. 
D) exclusions. 
A) endorsements. 
B) binders. 
C) conditions. 
D) exclusions.

Question 9

The primary purpose of coinsurance in property insurance is to

Accepted Answer

A) reduce moral hazard. 
B) achieve equity in rating. 
C) minimize problems in settling claims. 
D) eliminate small losses. 
A) reduce moral hazard. 
B) achieve equity in rating. 
C) minimize problems in settling claims. 
D) eliminate small losses.

The purpose of a coordination-of-benefits provision in group health insurance plans is to

The deductible used for automobile collision losses is an example of a(n)

Exclusions are used in insurance policies for all of the following reasons EXCEPT

That part of a property and liability insurance contract that contains information about the property or activity to be insured is called the

The primary purpose of coinsurance in property insurance is to

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance

Auto Insurance Continued

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

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Exam 10: Analysis of Insurance Contracts

The purpose of a coordination-of-benefits provision in group health insurance plans is to

The deductible used for automobile collision losses is an example of a(n)

Exclusions are used in insurance policies for all of the following reasons EXCEPT

That part of a property and liability insurance contract that contains information about the property or activity to be insured is called the

The primary purpose of coinsurance in property insurance is to

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance

Auto Insurance Continued

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters