Insurance Contract Quiz

What is the main purpose of a contract of insurance?

• To avoid paying indemnities

• To increase the risk of potential losses

• To protect against unforeseen events and mitigate economic loss

• To make a profit for the insurance company

What is the maximum time frame for the insurance company to advance a minimum amount as part of the indemnification?

• 40 days

• 20 days

• 50 days

• 30 days

What is the main characteristic of a contract of insurance?

• Guaranteed indemnification

• Fixed premium amount

• Uncertainty of the outcome

• Guaranteed profit for the insured

What is the document that contains the fundamental requirements regulating all insurance contracts?

• Certificate of insurance

• Insurance proposal

• Provisional coverage document

• Policy

What is the consequence of not paying the second or subsequent periodic premiums for the insurance?

• Automatic renewal of the contract

• Suspension of coverage after a grace period

• No impact on the coverage

• Immediate termination of the contract

What is the main requirement for a risk to be insurable?

• It must be uncertain and fortuitous

• It must be certain and predictable

• It must be impossible to quantify

• It must be illegal

Who is the person exposed to the risk in an insurance contract?

• Insured

• Beneficiary

• Insurer

• Policyholder

What is the term used to describe insuring an object for a value higher than its actual worth?

• Overinsurance

• Inadequate coverage

• Excessive indemnification

• Underinsurance

What is the purpose of communicating other insurance contracts to the company?

• To increase the coverage of the existing contracts

• To cancel the existing contracts with other companies

• To avoid paying premiums to multiple companies

• To ensure the company is aware of all the risks and interests covered by other contracts

What is the obligation of the insured or beneficiary once a claim occurs?

• To take all possible measures to minimize the damages caused by the claim

• To delay the communication of the claim to the insurer

• To keep the claim a secret from the insurer

• To intentionally cause more damages to benefit from the claim