Insurance Coverage and Compensation Quiz
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Questions and Answers

What does the contribution principle aim to prevent?

  • Overpayment from multiple insurances (correct)
  • Preventing individuals from getting any insurance
  • Underpayment from multiple insurances
  • Underinsurance of risk

    • To assess insurance adequacy, what should be compared to the value of the insured risk?

  • Total insurance premiums paid
  • Insurance coverage duration
  • Total combined insurance amounts (correct)
  • Number of insurance policies held

    • In the given example, how were the insurance amounts distributed among insurers A, B, and C for the house?

  • SAR 600,000, SAR 200,000, SAR 200,000
  • SAR 500,000, SAR 300,000, SAR 200,000 (correct)
  • SAR 400,000, SAR 300,000, SAR 300,000
  • SAR 700,000, SAR 200,000, SAR 100,000

    • How is insurance density calculated?

    <p>(insurance amount) / (value of insurance subject)</p> Signup and view all the answers

    What does an insurance density of 1 indicate?

    <p>Just right insurance amount</p> Signup and view all the answers

    In case of a fire with damages estimated at SAR 800,000 for a house insured at SAR 1,000,000, what will the house owner receive as compensation?

    <p>SAR 800,000</p> Signup and view all the answers

    What does the 'contribution principle' apply to?

    <p>General insurances only</p> Signup and view all the answers

    When assessing insurance adequacy, what confirms sufficient coverage?

    <p>Total equals or exceeds combined insurance amounts</p> Signup and view all the answers

    In the given example, what was the value of the house when the fire broke out?

    <p>(Insurance density) * (1,000,000)</p> Signup and view all the answers

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