Which of the following does not constitute an insurable interest?.
avoidanc Show more QUESTION 1 From the insureds perspective the purchase of insurance is an example of avoidance. retention. transfer. loss prevention. combination. 1 points QUESTION 2 Probability may be defined as a measure of the likelihood of an occurrence. similar to risk. a measure of the degree of uncertainty. the number of losses that occur during the life of the exposure. all of the above. 1 points QUESTION 3 According to the law of large numbers as the number of exposure units is increased the probability of losses declines. the chance or probability of total loss increases. the accuracy of predictions should be better. the accuracy of predictions should remain about the same. none of the above. 1 points QUESTION 4 Adverse selection is generally considered to be unavoidable. affects the accuracy of insurers predictions. creates a random pattern of insured exposures. has little effect on the operation of the insurance mechanism. more than one of the above. 1 points QUESTION 5 Which of the following would permit the insurance company to void your automobile policy? concealing the fact that your brother was convicted of drunken driving. misstating your age. driving without a license. lending your car to someone without a license. all of the above. 1 points QUESTION 6 When there is a difference of opinion about the meaning of the terms in an insurance contract because they are capable of more than one interpretation the courts usually use the preferred meaning in Websters Dictionary. utilize the preferred meaning in Blacks Law Dictionary. usually favor the insurance company. usually favor the insured. declare the contract void. 1 points QUESTION 7 Waiver is the same thing as estoppel. involves the relinquishment of a known right. is an obsolete doctrine seldom used in insurance today. is an exception to the principle of indemnity. none of the above. 1 points QUESTION 8 In order to void a contract when the insured has made a misrepresentation in most states the insurer must generally prove that the misrepresentation was both intentional and material. was intentional only since all statements made by the insured are presumed to be material. involved a material fact regardless of intent. was made; there is no need to prove materiality or intent. none of the above. 1 points QUESTION 9 In an insurance contract subrogation provides that: three parties may collect from the insurer as a result of one negligent act. the insureds right to collect from a negligent third party is transferred to the insurer to the extent he or she receives payment from the insurer. The insured must give up the right to receive damages from the insurance company if the insured is negligent. The insured may collect from his insurer and the negligent partys insurer. none of the above. 1 points QUESTION 10 Which of the following does not constitute an insurable interest? a bank holding a mortgage on your home. you make an offer to buy your neighbors car. you inherit a ski lodge in Aspen Colorado. your lease makes you liable for fire damage to your rented premises. you have custody of a valuable painting when the owner is away. 1 points QUESTION 11 By definition estoppel: is the failure to disclose known facts. prevents one from denying a fact if the fact was admitted to be true by previous actions. allows the insurer to deny liability on the basis of the insureds previous actions. is the intentional abandonment of a known right. none of the above. 1 points QUESTION 12 In the event of a total loss to property insured under a stated value policy payment will generally be made for the face amount of the policy. replacement cost. actual cash value. the cost to repair or replace the property. none of the above. 1 points QUESTION 13 If an agent tells an insured that a breach of a policy condition will not affect the coverage and payment of a claim and a loss occurs the insurer may deny coverage if the breach contributed to the loss. be liable for the loss because the agents acts are considered acts of the insurer. deny liability if the agent was not authorized to make such statements. deny liability because a waiver must be in writing before it is valid. none of the above. 1 points QUESTION 14 The term hazard refers to the same thing as the term peril. a condition that increases the chance of loss. the same thing as risk. uncertainty regarding loss. the same thing as probability of loss. 1 points QUESTION 15 General unemployment in a recession would generally be considered to be a static fundamental risk. a dynamic fundamental risk. a static particular risk. a dynamic particular risk. none of the above. 1 points QUESTION 16 A peril as distinguished from a hazard is defined as a condition that increases the likelihood of loss. the cause of a loss. the same thing as risk. the result of a loss. none of the above. 1 points QUESTION 17 The type of retention that is always undesirable is unfunded retention. unintentional retention. conscious retention. voluntary retention. all forms of retention are undesirable. 1 points QUESTION 18 The ultimate goal of risk management is to minimize insurance expenditures. make certain that uninsured losses do not occur. minimize the adverse effects of losses and uncertainty connected with risks. get the best buys in the field of insurance. eliminate financial loss. 1 points QUESTION 19 The risks most suited to treatment by insurance are those in which there is a high probability and a low potential severity. a low probability and a high potential severity. a high probability and a high potential severity. a low probability and a low potential severity. none of the above. 1 points QUESTION 20 Those risks most suited to treatment by loss prevention are those in which the probability is low and the potential severity is high. the probability and potential severity are both low. the probability is high and potential severity are both high. the probability is high and the potential severity is low. none of the above. 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Which of the following does not constitute an insurable interest?
