BASIC NON-LIFE EXAM REVIEWER SETA True or False: 1. Comprehensive insurance issued to cover private houses and household under fire policy is otherwise known as package policy. 2. The value of the ship is ts value at the beginning of the risk including all articles or ‘changes which add to its permanent value. 3. There is reinsurance when the same risk is insured by several insurers repeatedly in respect to the same subject and interest. 4. The definition of “insured” as used in the auto lability policy includes as insured the employees of a garage who may be operating the automobile with permission of the name insured. 5. Death or bodily injury to any person in the emplay of the insured arising out of and in the course of such employment is not compensable under a motor car policy. 6, Suretyship exists whenever one party guarantees performance by another party of ‘an obligation or undertaking 7. All isks policies include all peril. 8, Ifthe insured property is more than % destroyed, it may be abandoned to the Company as a total loss, according to the standard fire policy. 9. Warranty in Marine insurance is a stipulation forming part of the policy as to some fact, condition or circumstance relating to the risk 10. if more than 2/3 of the goods value is actually lost the owner has the right to abandon and consider it a total loss. Multiple Choice: Encircle the letter of your choice. 111. Explosion to be recoverable as extraneous risk and written in conjunction with the standard fire policy must be: 2. Explosion from pressure vessels b. Anyexplosion Chemical explosion, as in the case of gas used for lighting or domestic purposes d. None of the above 412. Under the provision of the Insurance Code, @ cancellation notice to the insured from the insurer, to be effective, shall be based on the occurrence of any of the following except: Non-payment of premium ‘Verbal notice to the insured Discovery of fraud or material misrepresentation Physical changes in the property insured making the property uninsurable13, A contract signed and executed by a third party in favor of a bonding company by virtue of which said party binds himself to indemnify the company against loss which may arise by reason of the Issuance of the bond is called: Contractor’s bond Fiduciary bond Surety bond ‘Third party indemnity agreement 414, Why must an insured have an insurable interest in the property insured? a. To obtain a measurement of the insured’s loss, b. Guard against moral hazard Prevent wagering 4. All the above 15. Allof the following are true, except a. ASurety bond cannot be made a substitute for an insurance policy as cover for a motor vehicle under the CMVLL A.Certificate of cover issued to an operator of motor vehicle may serve as proof of coverage ©. Acertificate of cover can be presented to government agents in charge of enforcing traffic laws 4. Certificate of cover may be issued in lieu of a certificate of insurance 16. In Fidelity or Surety bonds, the word “indemnity” refers to: 2. An agreement to protect both principal and obligee b. An agreement to protect the surety © An agreement to protect the principal d. An agreement to protect the oblige 17. A passenger, under the LTO insurance 2. Is always a fare paying person being transported and conveyed by # motor vehicle for transportation of passenger for compensation b. Need not necessarily be 2 fare paying passenger Combination of 2 & b 4. None of the above 18. A term which refers to 2 relative division of risk between the insurer and the insured depending upon the relative amount of the policy and the actual value of the property insured and takes effect only when the actual loss is partial and less than the amount of the policy is Reinsurance Co-insurance Double insurance . Over insurance 19. A kind of insurance that protects the insured against loss due to non-performance of contract to which he is a party isDisability insurance Cooperative insurance Excess insurance . Guaranty insurance 20. Which of the following statements in Marine Insurance on “abandonment” is false? It is an act of the insured which after a constructive total; loss, he declares the relinquishment to the insurer of his interest in the thing insured It ean be partial ar conditional It is equivalent to a transfer by the insured of his interest in the thing insured It can be sustained only upon cause specified in the notice of abandonment 8. c 3. 21. An insuring agreement: b, c 6. 22. Why is the application for insurance important? a b. c 6. Defines the liability Specifies how much the insured will receive Defines the condition under which benefits will be paid subject to exclusions and limitation ‘Binds the insurance company to the risk It gives the company information for the sale of insurance at a later date Because it gives the company information on other prospects in the family It is the easiest way to get the applicant to sign up for coverage Because the company accepts or rejects the applicants based on the information in the application 23, The provision in a Standard Fire Policy that-except as may be stated on the face of this policy there is no other insurance on the property hereby covered- breach of this condition will render the policy null and void is known as Control of the property clause Waiver of premium Average clause Other insurance clause 24. With respect to Coinsurance Average or Contribution Clause which of following statements is true The insured is never penalized The insured is always penalized Under some circumstances, the insured is penalized None of the above 25. Under the average clause of the fire policy, the insured Shall be paid the full value of his loss Is not bound to insure the property Shall be considered a self-insurer of the uninsured portion None af the above26. The insurance law specifically prohibits misrepresentation by agents with regard to which of the following matters: 1. ‘The terms, benefits or advantages of any policy Il. The dividends to be paid by the insurance company ik ‘The financial condition of any company Iv. The gividends previously paid by the insurance company a) tang b) tard at 4d) allof the above 29. lettison, In Marine insurance a. Includes every wrongful act willfully committed by the master or crew to the prejudice of the owner b._ Refers to temporary detainment of property with a view to ultimate release c_ Refers to throwing overboard of cargo or part of a vessel's equipment in order to relieve a vessel when itis in peril 4. None of the above 28. Losses or damages due to consequences of civil war, revolution, rebellion, Insurrection oF clvll are covered by: Institute Cargo Clause-strike, riots and civil commotion Institute War Clouse Institute all risk (AR) None of the above 29. With respect to the Standard fire Policy, the term “Vacancy " means Unfurnished and not lived in Furnished but not lived in Lived in but not furnished None of the above 30. According to the term of the “Loss Clause” (which is contained in the coverage from attached to a Fire Policy) must an insured request the reinstatement of his insurance after a loss has occurred? Not until the premises have been restored Yes, ifthe loss exceeds 5% No, the coverage is not reduced by the occurrence (or payment) of 2 Loss No, the insurance company will reinstate the coverage automatically 31. In a court action to regain possession of his personal property, the plaintiff files a bond known as a. Attachment bond b. Seizure bond& Replevin bond d. Requisition bond 32. Under the Insurance Law, a fund was created to be used in the payment of allowed claims against an insurance company authorized to transact business in the Philippines, remaining unpaid by reason af insolvency of such company. The fund is the a. Security Fund b. Mutual Fund © Charitable Trust Fund 4d. Variable Contract Fund 33. Under the liability feature of an insurance policy, the term “upper limit” means the Extent of the liability for any accident involving more than one person Extent of the liability for one person injured or killed in an accident Amount of the company will pay for property damage ‘Amount the company will pay for property damage and medical coverage 34. Under the Compulsory Motor Vehicle insurance, the basis for determining the amount of insurance required for passenger liability is a. Horse power b. Displacement capacity c Number of passenger 4d. Unladen weight 35. Which of the following perils are not covered under the Standard Fire Policy a. Rebellion b. Civil War Enemy attack d. Allof the above 36. In Health insurance, total Disability is taken to mean a. Acomplete inability of the insured to engage in his occupation for a period specified in the policy b. Inability to engage in any gainful occupation for which he is fitted by education and training c The insured is not able to perform any gainful occupation d. Allof the above 37. An insured property being shipped may be stationary temporarily at a certain location. The property will eventually continue its way to its destination, The kind of shipment, in insurance is known a a FOB. b. CLE On consignment 4d. In due course of transit 38. A misrepresentation is not material unless it led the insurance company to issue coverage that ‘would have been issued if the true facts had been known. This statement is.Valid only if there was @ witness False True False, a misrepresentation is always material 39. Generally, Fidelity Bonds are issued to become effective as of a given date for continuous term Specified term term of employment Concealment 40. An insurable interest exist in the following instances. \ " tH Ww. In the love and affection of persons related by biood or by law If person is interested in the well-being of another person If person is interested in buying insurance on another person Ifa person has an economic interest in the insured even though he is not related to the insured a Iytland it b. landiv © Lillandiv dL anding Type. COLUMN A COLUMN B 1. Form of coverage which primarily concerned with the a. Insurance contract protection of goods in transit and the means of transportation 2. Insurance affected in property either in one or several b. Particular average ‘companies to an amount which separately or in aggregate, exceeds the actual cash value of the insured’s interest in the propert 3. Indicate that the title will pass from the shippers to the cc. Replevin bond consignee at the specified point in transit 4. Exists when the same risk insured by several insurers dd. Over-insurance separately in respect to the same subject and interest 5. Statement by the insured, the truth of which becomes a fe. Cover notes condition of the validity of the policy 6. Written evidence of provisional insurance contracts which | Marine insurance are to be issued only when regular fire policies cannot be granted for certain valid reasons 7. Agreement among three parties whereby a surety g Warranty ‘company guarantees the performance by an individual of an obligation or undertaking in favor of the third party 8. Bond to prevent an individual from committing a specific fh. Injunction bond act that wil injure him such as selling a business 9. Aprovision which specifies that the insurance company i. Double insurance will pay only a part ofa loss and requires policyholder to pay the balance himself 10. Term used in marine insurance which means partial loss j. Surety Bond k. co-insurance L F.0.B. m. Physical Hazard n. Loss of voyageKey to correction 1 False [ave 21.0, aL iF 2. True, 12.8 2.0 32.0 20 True [aac 23.0, 33.8 BL a True 14.0 74.0, 34. at S.True 15.0 25.¢ 35.0 5.6 6. True 16.8 26.C 36.8 oe 7.True 17.8 27.¢ 37.8 7 8 False 18.8 28.0, 38.C aH S.True 39.0 29.4 39.C Eng 10. True 20.8 30.A 40.8 10.8