Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Practice Midterm

Practice Midterm

Ratings: (0)|Views: 46|Likes:
Published by hatanolove

More info:

Published by: hatanolove on Jun 28, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

06/16/2009

pdf

text

original

 
Sample Questions
(Please ignore questions on Employee Health Insurance)
Multiple Choices
1.The definition of “risk” suggested in the text views risk asa)a condition of the real world. b)a state of mind.c)Uncertainty in future outcome.d)none of the above.2.Which of the following is most likely a pure risk?a)Gambling at a casino. b)Investing in the stock market.c)Asking someone out for a date.d)Slipping on the ice while walking to class.e)None of the above is a pure risk.3. Properly used, the microwave oven is safe and convenient for heating a variety of foods in a short time, but the microwave can cause scald burns if it is used improperlyor unsafely. Be careful when removing a wrapper or cover from a hot item. Hot steamescaping from the container as the covering is lifted can cause a burn. Here, we see anexample of:a)Avoidance b)Self-insurancec)Loss preventiond)Direct losse)Loss reduction4. Given the following loss frequency distribution based on historical losses calculate theexpected number of losses that will occur in the coming year. The total number of exposures (N) is 1,000.OutcomesProbabilit
 
y0/1,000.7010/1,000.2530/1,000.05a).004 b).04c).40d)4e) 40
 
5. There are 2,000 students at one school and each year there are 100 losses reported bystudents due to theft. In categorizing these losses 60% are, on average, $20 losses.The remaining thefts are, on average, $30. Calculate the expected loss per student per year.a)$1.20 b)$24.00
c)$.05
d)$25.00e) None of Above.For the following questions, assume that you have the State Farm Car Policy handed outin class, including the coverages and limits shown on the Declarations page. For eachsituation, calculate how much your insurance policy would pay, in total. Unless otherwiseindicated, assume the loss occurs during the policy period. Do not assume facts not givenin the question.7. While you are driving your car in Hawaii, you run into a parked car. It costs $800 torepair your car and $1,200 to repair the car you hit. Your policy will pay:a).0 b). $700c). $1,200d)$1,900e). None of the above.8.One night someone breaks into your car and steals your radar detector. Althoughyour car is not damaged, it costs $500 to replace the detector. The Actual Cash Value of the detector before it was stolen was $300. Your policy will pay:a). 0b). $300c). $500d). $800e). None of the above9.While walking to class, you are hit by a car and seriously injured. You incur $35,000 in medical bills. You are entitled to collect a bodily injury award of $90,000, but the driver only has 20/40/15 liability limits. Your policy will pay:a).0 b). $25,000c). $70,000d). $90,000e). None of the above
 
10.A 12 year old girl cannot be held to a contract she signed with a modelingagency because which requirement of a contract would be violated?a).Offer and acceptance b).Considerationc).Competent partiesd).Legal purposee).None of the above11.By refusing to provide health insurance coverage for a person with a seriousheart ailment, the insurer:a).Allows the transfer of ris b).Avoids an ideally insurable lossc).Keeps the person from receiving medical treatmentd).Prevent adverse selectione).All of the above12.The principle of indemnity provides that:a).Insurance premium rates must be neither too high nor too low b).The insured should be paid for the loss he or she suffered and no more nor lessc).The insured shall be paid exactly the fact amount of the policyd).People who cause accidents should pay for the loss that resultse).Only indemnity companies may issue contracts of indemnity13.The right of subrogation:a).Prevents the insured from collecting twice for the same loss b).Sometimes conflicts with the principle of indemnityc).Increases the cost of insuranced).Is not applicable in fire insurancee).Applies only to ocean marine insurance14.Binders are:a).A method of storing insurance policies for safekeeping b).Temporary insurance contractsc).More expensive than regular insuranced).A method of changing the provisions of an insurance contracte).More dependable than other forms of insurance15.Health maintenance organizationsa).Pay providers on a fee-for-service basis b).Require significant cost sharing by employeesc).Provide unlimited employee choice of providersd).Act both as providers and insurerse).All of the above

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->