Insurance MCQ

All of the following are common law defenses against negligence, except: a. Contributory negligence b. Statute of Limitations c. Assumption of risk d. Intervening cause Answer: b. Statute of Limitations

Liability coverage is designed to: a. Protect the insured from bodily injury and property damage they are legally obligated to pay b. Protect an insured from being sued by an injured party c. Cover injuries and damages caused by the insured's intentional and unintentional actions d. Permit the insured to countersue the insurer for losses not covered Answer: a. Protect the insured from bodily injury and property damage they are legally obligated to pay

Which term describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first. a. Excess insurance b. Pro rata liability c. Primary insurance d. Contribution by Equal Shares Answer: d. Contribution by Equal Shares

Negligence is what kind of tort? a. A criminal tort b. An intentional tort c. A gross tort d. An unintentional tort Answer: d. An unintentional tort

Which of the following relationships involves vicarious liability? a. Employer and employee b. Husband and wife c. Wholesaler and retailer d. Teacher and student Answer: a. Employer and employee

P's liability policy has the following limits: $50,000 per person, $250,000 per occurrence, and $400,000 aggregate. During the policy period, the policy paid out $250,000 in liability claims. If P suffers another loss of $250,000 during the same policy period, how much will the policy pay a. $150,000 b. $250,000 c. $400,000 d. $50,000 Answer: a. $150,000

Which of the following prevents all recovery for injuries if the claimant was also considered partially negligent? a. Comparative negligence b. Vicarious negligence c. Proximate negligence d. Contributory negligence Answer: d. Contributory negligence

A chain of events may be broken by which of the following, thus freeing the defendant from liability? a. Concurrent causation b. Inherent vice c. Intervening cause d. Absolute liability Answer: c. Intervening cause

Which of the following defines a tort? a. Liability assigned to one party for the conduct of another b. An award to an injured party c. A wrongful act d. An unforeseen event from which damage results Answer: c. A wrongful act

A second negligent act that interferes with the chain of events leading to a loss is known as a(n): a. Tort b. Foreseeable consequence c. Intervening cause d. Loss of consortium Answer: c. Intervening cause

If other insurance also applies to a loss covered by a policy, which of the following will establish the method for determining how the insurance companies will pay the loss? a. Pro rata liability b. Claim Settlement c. Subrogation d. Limit of Liability Answer: a. Pro rata liability

All of the following are true of negligence, except: a. It does not include breach of contract b. It is a type of tort c. It is the failure to use ordinary care d. It does not require a duty to be owed Answer: d. It does not require a duty to be owed

The formal statement an insured provides to an insurer including all the details an insurer needs to assess its liability following a loss is known as a: a. Certificate of Insurance b. Binder c. Notice of loss d. Proof of loss Answer: d. Proof of loss

Which of the following types of liability limits allow the most to be paid for a single occurrence without regard for the number of claimants? a. Per Person Limit b. Comprehensive Limits c. Split Limits d. Combined Single Limit Answer: d. Combined Single Limit

Policy A provides liability coverage to a Fred's Grocery up to $500,000. Policy B provides coverage for the same risks up to $1.5 million. Both policies pay on a pro rata basis. If Fred's Grocery is determined to have a legal liability of $400,000 to a claimant who was injured on the property, how much will Policy A pay? a. $500,000 b. $100,000 c. $400,000 d. $50,000 Answer: B

All of the following are common law defenses against negligence, except: a. Statute of Limitations b. Intervening cause c. Assumption of risk d. Contributory negligence Answer: a. Statute of Limitations

Driver D slid into another car causing an accident in which three people in the other car were injured. Two injured parties claimed $15,000 in medical expenses and the third person claimed $25,000. How much will D's insurance company pay if her policy has 25/50 limits for bodily injury? a. $50,000 b. $45,000 c. $60,000 d. $75,000 Answer: a. $50,000

H's liability policy has the following limits: $25,000 per person, $100,000 per occurrence, and $2,000,000 aggregate. This year, five separate claimants file in the amount $25,000 for injuries suffered in a single accident. How much will the policy pay? a. $25,000 b. $50,000 c. $125,000 d. $100,000 Answer: d. $100,000

All of the following are true about liability, except: a. Liability policies pay costs incurred by an insured to sue negligent third parties b. The burden of proof is on the injured party to prove that the other party was negligent c. A loss may take place over a period of time rather than all at once d. Breach of contract is not considered an act of negligence Answer: a. Liability policies pay costs incurred by an insured to sue negligent third parties

All of the following statements regarding liability losses are correct, except: a. Property damage includes physical damage to tangible property, including loss of use of that property b. Personal injury includes libel, slander, and false arrest c. Loss of consortium means the loss of companionship of a husband or wife d. Bodily injury includes personal injury, physical injury, sickness and disease Answer: d. Bodily injury includes personal injury, physical injury, sickness and disease