PPIA Module 1 Quiz

The United States began popularizing insurance, in 1732 this man initiated the idea of fire insurance as a standard practice. He started the first insurance company in Charleston, South Carolina. He also founded the Philadelphia Contributionship for insurance on homes lost from a fire. Who is this?

• Benjamin Franklin

• Tedd Van Guten

• Arnold Winkins

• Samuel Owens |||

What is a premium?

• A higher tier for a subscription

• VIP membership

• A guaranteed small loss that's used to prevent a large loss.

• VIP Membership+Higher tier membership

Answer explanation

Usually, the policy is in effect as long as the premiums are paid.

What's an insurance policy?

• Just stuff to read.

• Guidelines that make sure I don't break the rules

• A contract where one party undertakes to indemnify another or pay a specified amount based on contingincies. NEEDS a premium

• A special contract that I sign which agrees to pay a specified amount to another party based on contingencies. DOES NOT need a premium

What are the 4 requirements to make contract legal and valid? MULTIPLE ANSWERS!!

• Not against public policy or other wise illegal

• Legal capacity of parties to contract

• A sufficient consideration for each promise

• A manifestation of assent to its own terms by the parties who make the contract

All property and liability insurance contracts are comprised of four basic parts, what are declarations?

• Declaration of Independence

• An oath to a promise

• Material relating to the subjects covered, and all guidelines.

• A piece of paper that puts on oath that you'll pay your premium or else you'll be fined

Answer explanation

Descriptive material relating to the subjects covered, persons insured, the premium to be paid, period of coverage, and policy limits or amounts of insurance.

Insuring agreements

• Summarizes promises form insurance holder

• Agreement from one person to another person

• Agreement on how much you'll be paying for your premium

• Agreement that summarizes the promises from the insurance company

Answer explanation

Summarizes the major promises of the insurance company, as well as state what is covered in the policy.

Why are exclusions and conditions important?

• Exclusions and conditions are irrelevant to agreements.
• Exclusions and conditions are crucial for clarifying coverage and managing risks in agreements.
• They only complicate the negotiation process.
• Exclusions and conditions eliminate coverages which might duplicate those in other policies to be insured.

Answer explanation

Exclusions are necessary to eliminate coverages which might duplicate those in other policies of the insured, be uninsurable perils, or be coverages of a specialized nature that the insurer is not qualified or prepared to offer or that require special underwriting and rating. 

What's automobile insurance?

• Insurance in case my home gets damaged which is covered for 8 years

• Insurance from the Apple Store on my brand new iPhone 16 pro max which is covered for 90 days

• Insurance for my battery powered kids car which covers collision, theft, storm damage

• Insurance for an automobile in which one party agrees to pay another party's financial loss which covers collision, theft, storm damage

What are 2 types of automobile coverages? MULTIPLE CHOICE!

• Collision

• Destruction

• Comprehensive

• Binding

What's home owners insurance?

• Policy protecting family in case you decide you don't want the home any more

• Policy that protects an individuals house in case loss by fire, natural causes, vandalism

• Policy that protects only the appliances inside the home

• Policy that protects you incase someone dings your wall paint, doors, window, or cabinets