Insurance Basics Quiz

Aarush is considering purchasing insurance for his new car. What is the primary purpose of insurance?

• To make a profit for the insurer

• To encourage reckless behavior

• To protect against risks of loss

• To provide financial support for investments

Krish is considering purchasing insurance for his new car. What is the term for the amount he must pay to receive insurance coverage?

• Limit of insurance

• Claim

• Premium

• Deductible

In a business meeting, Dhruv presented various types of risks to his team. Which of the following is NOT a type of risk?

• Speculative Risk

• Pure Risk

• Financial Risk

• Business Risk

In a recent incident, Dhruv faced a situation where he had to understand the implications of insurance terms. What does the term 'indemnify' mean in insurance?

• To provide legal advice

• To increase the value of an asset

• To restore the victim of a loss to their previous position

• To deny a claim

During a discussion in class, Avani asked, 'What is 'adverse selection' in insurance?'

• Choosing the best insurance policy

• Insureds selecting coverages likely to have losses

• A method of calculating premiums

• A type of insurance fraud

In a class project, Dhruv and Anika are working on a group assignment. Which of the following is a characteristic of an aleatory contract?

• One party makes a promise

• Unequal exchange of values

• Equal exchange of values

• Both parties must perform equally

Aarush recently purchased a new car and is curious about insurance. What is the maximum amount his insurer will pay for a covered loss called?

• Premium

• Deductible

• Limit of Liability

• Claim

In a recent incident, Krish's car was damaged in an accident, and his insurance company paid for the repairs. Which clause allows the insurer to pursue the other driver for the costs they covered?

• Subrogation Clause

• Waiver Clause

• Indemnity Clause

• Liberalization Clause

During a discussion in class, Kiara asked, "What is the term for a policy that covers multiple types of property in one contract?"

• Specific Insurance

• Blanket Insurance

• Comprehensive Insurance

• General Insurance

What is the purpose of the 'coinsurance clause' in Rahul's health insurance policy?

• To define the policy period

• To increase premiums

• To share losses between the insured and insurer

• To limit the insurer's liability