瑞达Rejda保险教材英文练习题

1、Principles of Risk Management and Insurance, 11e (Rejda)Chapter 9 Fundamental Legal Principles 1) Fundamental purposes of the principle of indemnity include which of the following?I. To reduce physical hazards.II. To prevent the insured from profiting from insurance.1/ )/ J/ A B c DI onlyII onlyboth

2、 I and IIneither I nor IIAnswer: BQuestion Status: Previous Edition2) Which of the following is a fundamental purpose of the principle of indemnity?A) to reduce moral hazardB) to minimize physical hazardsC) to settle property insurance losses on a replacement cost basisD) to require deductibles in a

3、ll property insurance policiesAnswer: AQuestion Status: Previous Edition3) Sam*s furniture was destroyed by a fire. The furniture cost $1200 when it was purchased, but similar new furniture now costs $1800. Assuming the furniture was 50 percent depreciated, what is the actual cash value of Sams loss

4、?A) $600B) $900C) $1200D) $1800Answer: BQuestion Status: Revised4) All of the following are exceptions to the principle of indemnity EXCEPT A) life insurance.B) valued policies.C) replacement cost property insurance.D) actual cash value property insurance.Answer: DQuestion Status: Previous Edition5)

5、 Under which of the following rules is actual cash value determined by taking into consideration all relevant factors an expert would use to determine the value of the property? A) the circumstantial evidence ruleB) the broad evidence ruleC) the property indemnity ruleD) the objective value ruleAnsw

6、er: BQuestion Status: Previous Edition1Copyright ? 2011 Pearson Education, Inc.6) A total loss under a valued policy is settled on the basis of theA) market value of the loss.B) actual cash value of the loss.C) replacement value of the loss.D) amount of insurance covering the loss.Answer: DQuestion

7、Status: Previous Edition7) Which of the following statements describes how losses will be settled if a property insurance policy is written on a replacement cost basis?A) Losses are settled without the applicable deductible.B) Losses are settled without a deduction for depreciation.C) The insurer mu

8、st replace the damaged or destroyed property in lieu of a cash settlement.D) The policy is converted to a valued policy.Answer: BQuestion Status: Previous Edition8) Which of the following statements about the principle of insurable interest is (are) true?I) It makes it difficult to measure the amoun

9、t of an insureds loss.J) . It reduces moral hazard.K) I onlyL) II onlyM) both I and IIN) neither I nor II Answer: B Question Status: Previous Edition9) All of the following will support an insurable interest for purposes of purchasing property and liability insurance EXCEPTA) close family relationsh

10、ip.B) potential legal liability.C) secured creditors.D) a contract right.Answer: A Question Status: Previous Edition10) Which of the following statements about an insurable interest in life insurance is (are) true? I. It is required of any person named as beneficiary.11) It may result from a pecunia

11、ry (financial) interest.A) I onlyB) II onlyC) both I and IID) neither I nor II Answer: B Question Status: Revised211) When must an insurable interest legally exist in life insurance?A) only at the time of the insureds deathB) only at the inception of the policyC) only at the time the beneficiary is

12、paidD) both at the time of the insureds death and at the inception of the policy Answer: BCopyright ? 2011 Pearson Education, Inc.Question Status: Previous Edition12) When must an insurable interest legally exist in property insurance for an insured to receive payment for a loss from the insurer?A)

13、only at the time of the lossB) only at the inception of the policyC) only at the time the loss settlement process takes placeD) both at the time of the loss and at the inception of the policy Answer: AQuestion Status: Revised13) Sue*s office building was damaged by a fire caused by a careless tenant

14、. After paying Sue for her loss, the insurance company sued the tenant to recover its loss. This suit is based on the principle ofA) warranty.B) insurable interest.C) utmost good faith.D) subrogation. Answer: D Question Status: Previous Edition14) All of the following are basic purposes of subrogati

15、on EXCEPTA) to eliminate adverse selection.B) to hold down the cost of insurance.C) to prevent an insured from collecting twice for the same loss.D) to hold the negligent person responsible for a loss. Answer*: AQuestion Status: Previous Edition15) Which of the following statements about subrogation

16、 is true?A) It is used primarily for losses paid under life insurance policies.B) It allows the insurer to sue its own insured who is negligent.C) The insureds right to collect benefits may be forfeited if the insured interferes with the insurers rights after a loss occurs.D) The insurer is required

17、 to exercise its subrogation rights. Answer: CQuestion Status: Previous Edition316) The principle of utmost good faith is supported by all of the following legal doctrines EXCEPTA) representations.B) warranty.C) subrogation.D) concealment. Answer: C Question Status: Previous Edition17) What is the l

18、egal significance of a material concealment by an insurance applicant?A) The contract is automatically voided from its inception.B) The contract is voidable at the insurers option.C) Loss payments are reduced by the degree of the concealment.D) The insurer is immediately entitled to a higher premium

19、. Answer: BQuestion Status: Previous Edition18) What is the legal significance of a material misrepresentation in an insurance application?A) The contract is automatically voided from its inception.B) The contract is voidable at the insurers option.C) Loss payments are reduced by the degree of the m

20、isrepresentation.D) The insurer is immediately entitled to a higher premium. Answer: BQuestion Status: Previous Edition19) A false statement made by an applicant for insurance is an example of aA) concealment.B) breach of warranty.C) lack of offer and acceptance.D) misrepresentation.Answer: DQuestio

21、n Status: Previous Edition20) Which of the following statements about a warranty in an insurance contract is (are) true? I. It is part of the insurance contract.11. Statements made by an insurance applicant are considered warranties rather than representations.)/ 17 J/ / A B c DI onlyII onlyboth I a

22、nd IIneither I nor II Answer: AQuestion Status: Previous Edition)/ )/ J/ )/ A B c D21) David owns a liquor store in a high-crime area. In order to obtain a reduced insurance premium, David promised to have a burglar alarm operating at the store when the store was closed. This agreement, which was in

23、corporated into the insurance contract, is an example of a representation, unilateral contract.contract of adhesion.warranty.Answer: DQuestion Status: Previous Edition22) Which of the following statements about offer and acceptance for insurance contracts is true? A) In property and liability insura

24、nce, agents typically do not have the authority to bind coverage. B) In life insurance, the agent can usually accept an offer by immediately binding coverage.C) In property insurance, the offer and acceptance are usually in writing but may be oral.D) In life insurance, the offer is merely the promis

25、e to pay the first premium.Answer: CQuestion Status: Previous Edition23) Chris applied for life insurance and paid the first premium on Monday. She was given an insurability premium receipt which specified that coverage was effective on the date of the application or the date of the medical exam, wh

26、ichever is later. She took the medical exam the following Thursday. She was found to be in perfect health. On which day was her coverage effective?A) on Monday, when she completed the application and paid the first premiumB) on Wednesday, two days after completing the application and paying the firs

27、t premiumC) on Thursday when she passed the medical examD) on Saturday, two days after passing the medical exam Answer: CQuestion Status: Previous Edition24) Which of the following statements about consideration in an insurance contract is (are) true? I. The insureds total consideration is submissio

28、n of a completed application.11. The insurers consideration is the promise to do those things specified in the policy.)/ )z J/ A B c DI onlyII onlyboth I and IIneither I nor IIAnswer: B Question Status: Previous Edition525) A contract in which the values exchanged are not equal because chance is inv

29、olved is called a(n)A) contract of adhesion.B) unilateral contract.C) conditional contract.D) aleatory contract.Answer: DQuestion Status: Previous Edition26) Why are insurance contracts said to be contracts of adhesion?A) The values exchanged by the parties to the contract are not equal.B) One party

30、 writes the contract, and the other party must accept the entire contract as written.C) Only one party makes a legally enforceable promise.D) Conditions are placed on the insurers promise to perform. Answer: BQuestion Status: Revised27) Why does the insured get the benefit of the doubt if an insuran

31、ce policy contains any ambiguities or uncertainties?A) because insurance contracts are aleatoryB) because insurance contracts are unilateralCopyright ? 2011 Pearson Education, Inc.C) because insurance contracts are conditionalD) because insurance contracts are contracts of adhesion Answer: DQuestion

32、 Status: Previous Edition28) Why can an insurer refuse to pay a claim if an insured fails to abide by the policy provisions?A) because insurance contracts are aleatoryB) because insurance contracts are unilateralC) because insurance contracts are conditionalD) because insurance contracts are contrac

33、ts of adhesion Answer: CQuestion Status: Previous Edition29) Which of the following types of insurance policies can usually be assigned without the insurers consent?I. Life insuranceII. Property insuranceA) I onlyB) II onlyC) both I and IID) neither I nor II Answer: AQuestion Status: Previous Editio

34、n630) What is the practical effect of an insurance policy being a conditional contract?A) The insurer can refuse to a pay claim unless the insured has complied with all policy provisions.B) The insured can assign the policy only with the insurers consent.C) The insurer can sue the insured for failur

35、e to pay any premiums.D) The insured gets the benefit of the doubt if a policy contains any ambiguities or uncertainties. Answer: AQuestion Status: Revised31) What is the practical effect of an insurance policy being a contract of adhesion?A) The insurer can refuse to pay claims unless the insured h

36、as complied with all policy provisions.B) The insured can assign the policy only with the insurers consent.C) The insurer can sue the insured for failure to pay any premiums.D) The policy is interpreted in the insureds favor if the policy contains any ambiguities or uncertainties.Answer: DQuestion S

37、tatus: Previous Edition32) All of the following statements about the rules governing agency relationships are true EXCEPTA) An agent must be authorized to act on behalf of a principal.B) An agency agreement may grant certain powers to the agent as well as denying the agent other powers.C) The princi

38、pal is responsible for the acts of agents only if the acts are criminal.D) Knowledge of the agent is presumed to be knowledge of the principal with respect to mattersCopyright ? 2011 Pearson Education, Inc.within the scope of the agency relationship.Answer: CQuestion Status: Previous Edition33) The

39、voluntary relinquishment of a legal right is calledA) subrogation.B) adhesion.C) estoppel.D) waiver.Answer: DQuestion Status: Previous Edition34) Frank asked his compan/s employee benefits director if his group health coverage could be converted to individual coverage. The benefits director said, Ye

40、s, you can convert to an individual policy, and the coverage is identical to your group coverage. Frank quit his job and converted to an individual policy. Six months later he filed a claim. He was dismayed to learn the conversion policy was limited compared to the group coverage, and his claim was

41、denied. What legal doctrine will allow Frank to bring a successful legal action against his former employer because he was financially harmed due to his reasonable reliance upon a representation of fact?)/ )/ )/ J/ A B c Dadhesionconcealmentestoppelsubrogation Answer: C Question Status: Revised35) J

42、anice purchased a living room set for $1,000 and insured this furniture on an actual cash value basis. Two years later the living room set was destroyed by a covered peril. At the time of loss, the property had depreciated in value by 25 percent. The replacement cost of the furniture at the time of

43、loss was $1,200. Assuming no deductible, how much will Janice receive from her insurer?A) $900B) $950C) $1,000D) $1,200 Answer: A Question Status: Previous Edition36) Jacob sold his house to Shelia for $140,000 in cash. Jacob threw in insurance on the house as part of the deal and did not bother tel

44、ling the insurer that there was a new owner. Four months after Shelia purchased the home, a windstorm damaged the roof. Which of the following legal characteristics of insurance contracts could the insurer use to legally deny payment for the damageto the roof?)/ )/ )/ )/ A B c DInsurance contracts a

45、re unilateral contracts.Insurance contacts are contracts of adhesion.Insurance contracts are aleatory contracts.Insurance contracts are personal contracts.Answer: DQuestion Status: Previous Edition837) Melodys car was damaged when another driver ran a stop sign and hit her car. Melody decided to col

46、lect from her own insurer and to let her insurer recoup the loss payment from the negligent driver who hit her. What fundamental legal principle is illustrated in this scenario? A) the principle of utmost good faith B) the principle of insurable interestC) the principle of subrogationD) the principl

47、e of reasonable expectations Answer: CQuestion Status: Previous Edition38) When Ben applied for life insurance, he was asked on the application if he smoked or used tobacco products. Ben answered No.H In reality, Ben smokes two packs of cigarettes a day. The policy was issued at the preferred, nonsm

48、oker rate.* If Ben dies 6 months after the policy is issued, upon what grounds will the insurer be able to legally deny the claim?A) warrantyB) misrepresentationC) waiverD) concealment Answer: B Question Status: Previous Edition39) Robin plans to open a bar in a high-crime area. She had difficulty o

49、btaining insurance for the business. She found an insurer willing to write the coverage, but only if Robin agreed to have a security alarm system in operation at all times when the business is closed. Robin*s promise to have a security alarm system operational as a condition of having the insurance

50、coverage in force is aA) binder.B) warranty.C) waiver.D) deductible. Answer: B Question Status: Previous Edition40) Dave is an agent for Easy Pay Insurance. Easy Pay insures only the highest-quality applicants. Dave wanted to earn more commissions, so he sold some policies to applicants he knew were

51、 below-average risks. When these policyowners started filing claims, Easy Pay tried toCopyright ? 2011 Pearson Education, Inc.deny the claims stating that Dave had not acted appropriately. Which general rule of agency makes Easy Pay responsible for the claims of the higher-than-average risk policyow

52、ners?A) There is no presumption of an agency relationship.B) Agents should be compensated based on the quality of the business they generate.C) A principal is responsible for the acts of its agents who are acting within the scope of their authority.D) An agent must have authority to represent the pr

53、incipal. Answer: CQuestion Status: Previous Edition)/ J/ )/ J/ A B c D41) Teds insurance claim was denied by XYZ Insurance Company. When Ted inquired why the claim was denied, he was told to, Read the exclusion on page 5 of the policy, Ted read the exclusion. In his opinion, the exclusion was poorly

54、 worded and vague. If a court of law agrees with Teds assessment of the exclusion, Ted may still be able to have his claim paid by the insurer because insurance contracts are personal contracts, unilateral contracts, aleatory contracts, contracts of adhesion.Answer: DQuestion Status: Previous Editio

55、n42) Mark owns a bar. The bar has a back room where Mark has some slot machines. Mark lets some of his patrons play the machines, and Mark keeps any profits. This type of gambling is illegal where Mark lives. Mark wanted to purchase insurance in case his slot machines were confiscated by the police.

56、 Such an insurance contract would not be enforceable. Which requirement needed to form a valid insurance contract is missing?A) considerationB) offer and acceptanceC) legal purposeD) competent partiesAnswer: CQuestion Status: Previous Edition43) Which distinct legal characteristic of insurance contr

57、acts states that only the insurers promise to perform is legally enforceable?A) contracts of adhesionB) unilateral contractsC) aleatory contractsD) personal contractsAnswer: BQuestion Status: Previous Edition44) Some courts have ruled that an alternative to replacement cost less depreciation should be used to determine the actual cash value of a property loss. Under this alternative, the value of property lost is determined by the price a willing buyer would pay a willing seller for the property in a free market. This method of determin