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NY Health and Accident Exam Questions and Complete Solutions Graded A+
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NY Health and Accident Exam Questions and Complete Solutions Graded A+
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NY Health and Accident ExamQuestions and Complete
Solutions Graded A+
Denning Muriithi [Date] [Course title]
, NY Health and Accident
1. Which of the following is NOT one of the three types of hazards? Answer:
Accidental Hazard
2. Which of the following is the PRIMARY source of information used by
insurance companies during the underwriting process? Answer: The
application for insurance
3. Which of the following statements is NOT true concerning the Law of
Large numbers? Answer: The size of the sample group is not relevant to
the accuracy of the results
4. Risk is best defined as Answer: An uncertainty of loss.
5. Which of the following is most likely to be uninsurable? Answer: The
purchaser of a new home wants to protect herself from a possible drop
in housing prices.
6. An insurance contract must comply with the "Principle of Indemnity".
Jar- ron's friend Nick, accidentally destroys Jarron's laptop computer. Nick
pays Jarron for the damage, but Jarron also submits a claim to his
insurance company for the laptop. The claim will be Answer: Denied
because Jarron has already been paid for the damage.
7. Meg has been in very good health in the past 3 years. She has been
exercising, her blood pressure is at a perfect level and her cholesterol is the
envy of all her friends. Because Meg is feeling so healthy, she decides to
cancel her health insurance policy. This is an example of which of the
following risk management methods? Answer: Risk retention.
8. Which of the following best demonstrates a morale hazard? Answer: A
recent pur- chaser of auto insurance drives less carefully, knowing
that the insurer will cover any losses that occur
9. Which of the following phrases best describes a "hazard?" Answer: A
condition that increases the chances of a loss
10. Which of the following is NOT a common risk management technique?
Answer: -
Multiply the risk by engaging in hazardous activities.
11.Horatio is a business owner who is part of a business owners group that
are buying old commercial buildings in their small city and refurbishing
them. Horatio has bought a beautiful historical building made mostly of
wood. He installs a sprinkler system right away to prevent a fire. What risk
management strategy is Horatio using? Answer: Risk reduction
12.All of the following are characteristics of an insurable risk, EXCEPT
Answer: Answer: The loss must be catastrophic in nature..
13.Adverse selection occurs when Answer: Answer: Applicants are
accepted by the insurer with little or no attention given to underwriting.
, NY Health and Accident
14. A 100-year flood is an example of which of the following types of risk?
Answer: -
Static risk
, NY Health and Accident
15.A church has had the woodwork in the building refinished and new stain
and varnish has been applied. The workers placed the rags and brushes that
were used to apply the varnish in a small closet and closed the door,
creating the possibility of spontaneous combustion. Which of the following
terms best describes this condition? Answer: Hazard
16.Which of the following most accurately describes reinsurance? Answer:
When an insurance company buys insurance for some of the risks for
which it has issued coverage.
17.Which of the following describes a "peril"? Answer: Lightning that
strikes a house and destroys electronic equipment inside.
18. A risk
where both profit and loss are possible is a risk.
Answer: -
Speculative
19.Willie's Widgets has been earning a large portion of their market share
for 10 years. During Willie's 11th year in business, Wynonna's Widgets
opens and her superior marketing practices leaves Willie unable to continue
in business. Which of the following types of risk caused Willie's loss?
Answer: Dynamic risk
20.Pure Risk Answer: a risk that presents the chance of loss but no
opportunity for gain
21.Speculative Risk Answer: a situation in which either profit or loss is
possible
22.Static Risk Answer: Losses that have historical factors and don't tend
to change. Static risks are pure risks.
23.Dynamic Risk Answer: The risk that arises from the continual change
in the business environment and therefore dynamic risk cannot be
transferred to an insurer.
24.Fundamental Risk Answer: affects large segments of society
-examples Answer: widespread unemployment, nuclear accident,
viruses, inflation, war, flood
25.Particular Risk Answer: risk that affects particular individuals (robbery
vandalism)
26.Which of the following best describes the purpose of the "insuring
agree- ment(s)" contained in an insurance policy? Answer: It contains the
insurer's promise to pay in case of a loss
27.When an insurer takes no action upon realizing material changes in a
contract, this is called Answer: Answer: An implied waiver
28.Milton agrees to steal and wreck Albert's car for $4,000, so that Albert
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