Fundamentals of Insurance BC Questions with 100% Correct Answers Latest Version 2024 Verified
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Fundamentals of Insurance BC Questions
with 100% Correct Answers | Latest Version
2024 | Verified
What is the major function of insurance? - to allow the spread of risk
What are the five important functions of insurance? -
1) insurance is the shifting of financial responsibility for a loss
2...
Fundamentals of Insurance BC Questions
with 100% Correct Answers | Latest Version
2024 | Verified
What is the major function of insurance? - ✔✔to allow the spread of risk
What are the five important functions of insurance? - ✔✔
1) insurance is the shifting of financial responsibility for a loss
2) payment will be made only in the event of an insured risk
3) the amount of payment is restricted to the amount required to indemnify the insured
4) insurance covers losses the object may be exposed to
5) the indemnity can be in the form of money or repair/replacement
What are the three main types of insurance included in broad insurance (property and casualty) -
✔✔Auto insurance
property insurance
liability insurance
(Also known as general insurance)
Identify the two major types of insurers - ✔✔
1) private insurers
2)government insurers
define how stock companies work compared to mutual companies - ✔✔Stock companies exist to turn a
profit
Mutual companies exist to provide lower insurance rates for its policy holders
What type of insurance involves government insurers - ✔✔Mandatory auto insurance, such as ICBC
, identify the two methods of distributing insurance and how the differentiate - ✔✔Direct Writing System
-represent products provided by one company exclusively
Independent brokerage
-represent more than one insurance company
Chapter 2 - ✔✔
Define the 3 categories of risk - ✔✔Personal
Property
Liability
Identify the 4 options for dealing with risk - ✔✔1) avoidance of risk
2) controlling of risk
3) retention of risk
4) transfer of risk
What are the two types of risk? Which is insurable? - ✔✔1) Pure Risk
2) speculative risk
Only Pure risk is insurable as there is no chance for financial gain
Define an insurance contract - ✔✔an agreement between two or more parties which is enforceable by
law
What are the five elements required to be present in all contracts - ✔✔1) agreement; an offer made, and
accepted
2) consideration; exchange of value between parties
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