CHAPTER --LAW OF INSURANCE
1.Question: What is the primary purpose of insurance?
Answer: To provide financial protection against specified risks.
2.Question: In insurance, what is a premium?
Answer: The amount paid by the insured to the insurance company for coverage.
3.Question: What is subrogation in insurance law?
Answer: The right of the insurer to pursue a third party that caused a loss to the insured
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4.Question: What does "utmost good faith" mean in the context of insurance contracts?
Answer: Both parties must disclose all relevant information honestly and in good faith.
5.Question: What is the principle of indemnity in insurance?
Answer: The insured should be restored to the same financial position as before the loss, without gaining a profit.
6.Question: What is a deductible in insurance policies?
Answer: The amount the insured must pay out of pocket before the insurance coverage kicks in.
7.Question: What is a peril in insurance terms?
Answer: The specific event or circumstance that causes a loss and triggers coverage under an insurance policy.
8.Question: What is a rider in insurance?
Answer: An additional provision added to a policy to modify or expand its coverage.
9.Question: Define reinsurance in the insurance industry.
Answer: When an insurance company transfers some of its risk to another insurer
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10.Question: What is underwriting in the context of insurance?
Answer: The process of evaluating and selecting risks to determine the appropriate premium.
11.Question: What is a policyholder in insurance?
Answer: The person or entity that owns an insurance policy.
12.Question: What is the purpose of a certificate of insurance?
Answer: It provides evidence of insurance coverage and its terms.
13.Question: In insurance law, what is the principle of contribution?
Answer: When multiple insurance policies cover the same loss, each contributes proportionally.
14.Question: What is the difference between first-party and third-party insurance?
Answer: First-party covers the insured's own losses, while third-party covers liability to others.
15.Question: Define the term "exclusion" in insurance policies.
Answer: Specific risks or circumstances not covered by an insurance policy.
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