Business > EXAM > Fundamentals of Insurance Practice Exam| 100 questions| with complete solutions (All)

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Fundamentals of Insurance Practice Exam| 100 questions| with complete solutions

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The coverage limits on Homeowners Insurance Policies are determined after calculating the Replacement Cost of the dwelling building. Once this value is determined, the rest of the coverage limits are ... calculated. Which of the following coverage limits is correct? a) Personal Property- 100% of Coverage A b) Detached Private Structures - 10% of Coverage A c) Additional Living Expenses- - 10% of Coverage A d) Dwelling- 100% of Personal Property Coverage Correct Answer: The answer is B Insurance has been around for a long time and can be traced back hundreds of years. The birth of Fire insurance can be traced back to: A) London, England in June 1660 B) London, England in September 1666 C) London, England in June 1666 D) London, England in September 1888 Correct Answer: The answer is B London, England in September 1666 Which of the following is NOT one of the 5 "Functions of Insurance"? A) Spread of Risk B) Employment C) Loss Prevention and Loss Reduction D) Loss Control and Loss Transfer Correct Answer: The answer is D Loss Control and Loss Transfer Insurance is based on the "Principle of Indemnity". Which of the following definitions best describes this principle? a) Ensures that people receive the actual amount of their loss, no more no less b) Ensures that the limits of insurance are always reinstated after a loss c) Ensures that people will receive a cash settlement for all insured losses d) Ensures that people will be provided with a place to stay when their dwelling is deemed unfit for occupancy after a loss Correct Answer: The answer is A Ensures that people receive the actual amount of their loss, no more no less The 2 different types of Private Insurers are Stock Companies and Mutual Companies. These 2 types of companies have many similarities and some differences. One main difference is the ownership. Who are mutual Companies owned by? a) Stockholders b) Policyholders c) Employees d) The Federal Government Correct Answer: The answer is B Policyholders [Show More]

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