Resource Qestions Ch 1-3
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Questions and Answers

In what year did insurance originate according to the code of HAMMURABI?

  • 1800-1750 BCE (correct)
  • 1750-1700 BCE
  • 1700-1650 BCE
  • 1650-1600 BCE

    • What is the main function of insurance?

  • Risk acceptance
  • Risk rejection
  • Risk management (correct)
  • Risk assessment

    • What are the three main elements of UW?

  • Risk acceptance/rejection, investment, and strategic planning (correct)
  • Risk assessment, investment, and customer service
  • Risk assessment, underwriting, and claims handling
  • Risk acceptance/rejection, underwriting, and customer service

    • What is the purpose of the line guide?

    <p>To specify criteria for assessing risk</p> Signup and view all the answers

    What is the main purpose of the line guide in insurance?

    <p>To specify criteria for assessing risk</p> Signup and view all the answers

    What is the difference between replacement cost and ACV in insurance?

    <p>Replacement cost is the cost to replace an item with a new one, while ACV is the cost to replace an item with a used one</p> Signup and view all the answers

    What are replacement cost and ACV?

    <p>Different types of valuation</p> Signup and view all the answers

    What are the personal characteristics that UWs need to have?

    <p>Openness, curiosity, and confidence</p> Signup and view all the answers

    What is the significance of the broker/agent report in insurance?

    <p>It assesses the risk of the applicant</p> Signup and view all the answers

    Why is loss experience critical in insurance?

    <p>It helps predict future potential losses</p> Signup and view all the answers

    What is the significance of the applicant's name in insurance?

    <p>It is important for identification purposes</p> Signup and view all the answers

    What is the difference between additional insureds and additional named insureds?

    <p>Additional named insureds have equal rights and responsibilities as the primary named insured</p> Signup and view all the answers

    What is the purpose of verifying an applicant's loss history in insurance?

    <p>To identify any fraudulent claims</p> Signup and view all the answers

    What personal characteristics are important for an underwriter in insurance?

    <p>Openness, curiosity, and confidence</p> Signup and view all the answers

    What is loss experience critical for?

    <p>Predicting future potential losses</p> Signup and view all the answers

    What is the role of additional named insureds in an insured policy?

    <p>They are the primary policyholders</p> Signup and view all the answers

    Why is it necessary to verify an applicant's loss history?

    <p>To prevent fraud</p> Signup and view all the answers

    What do denied claims reveal about the insured?

    <p>Their habit of seeking money from an insurance company for illegitimate claims</p> Signup and view all the answers

    Why is the employment status and occupation of the applicant important in insurance?

    <p>It helps predict future potential losses</p> Signup and view all the answers

    Study Notes

    1. Insurance is a contract between insurer and insured for reimbursement in the event of loss or liability.
    2. Insurance originated in the code of HAMMURABI in 1800-1750 BCE.
    3. Insurance on sea journeys began with loans from money lenders.
    4. Lloyds of London became a center for insurance transactions.
    5. The three main elements of UW are risk acceptance/rejection, investment, and strategic planning.
    6. The line guide specifies criteria for assessing risk.
    7. Insurance policies are contracts of adhesion that must be clear and unambiguous.
    8. Replacement cost and ACV are different types of valuation.
    9. Manuscript policies are customized and require careful assessment by UWs.
    10. UWs need technical, analytical, communication, and organizational skills, as well as personal characteristics such as openness, curiosity, and confidence.
    11. Applicant's name is important in personal and commercial lines insurance for various reasons.
    12. Additional insureds and additional named insureds have different roles in an insured policy.
    13. UW performs credit checks to assess financial stability and may use alternative ways to do so.
    14. The broker/agent report is significant to UW for risk assessment.
    15. UW should pay attention to effective and expiry dates and be aware of backdated policies.
    16. The employment status and occupation of the applicant are important factors to consider.
    17. Loss experience is critical for predicting future potential losses.
    18. It is necessary to verify an applicant's loss history.
    19. Information denied claims reveal the insured's habit of seeking money from an insurance company for illegitimate claims.
    20. UW must review prior cancellations and confirm the reason for cancellation.

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    Description

    This quiz covers essential topics related to the insurance industry, including the history of insurance, underwriting (UW) principles, and factors that affect risk assessment. With questions on policy contracts, valuation methods, and loss history, this quiz provides a comprehensive overview of what UWs need to know to make informed decisions. Additionally, it covers the importance of applicant information such as their employment status, occupation, and loss history. Whether you're an experienced UW or just starting, this quiz will help you sharpen

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