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Insurance MCQ Questions and Solutions with Explanations | Commerce

Insurance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Insurance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-9 section-1

Each section contains 100 MCQs on Insurance .
81
Which of the following statements are correct?
i. In order to be insurable, a risk must be capable of statistical estimation.
ii. In insurance, only economic or financial losses can be compensated.
Discuss
Answer & Solution
Answer: Option C
Solution:
Both the statements are correct: In order to be insurable, a risk must be capable of statistical estimation and In insurance, only economic or financial losses can be compensated.
82
Which of the below losses are covered under keyman insurance?
Discuss
Answer & Solution
Answer: Option B
Solution:
Losses related to the extended period when a key person is unable to work are covered under keyman insurance.
83
Of 400 houses costing each Rs.20, 000 if on an average 4 houses are damaged in fire causing a total loss of Rs80,000 what should be the annual contribution of each house owner.
Discuss
Answer & Solution
Answer: Option B
Solution:
Of 400 houses costing each Rs.20, 000 if on an average 4 houses are damaged in fire causing a total loss of Rs.80,000, Rs.200 should be the annual contribution of each house owner.
84
The losses of a few are shared amongst many through the mechanism of –
Discuss
Answer & Solution
Answer: Option B
Solution:
The losses of a few are shared amongst many through the mechanism of Insurance.
85
_________ consists of collecting premiums from numerous individuals to compensate the few who may suffer losses.
Discuss
Answer & Solution
Answer: Option A
Solution:
Pooling consists of collecting premiums from numerous individuals to compensate the few who may suffer losses. The pooling of risk is fundamental to the concept of insurance.
86
Secondary burden of risk consists of _________ and _________ one has to bear if exposed to loss situation.
Discuss
Answer & Solution
Answer: Option B
Solution:
The secondary burden of risk consists of Costs and Strains one has to bear if exposed to loss situation.
87
_________ and _________ refer to measures to reduce chance of occurrence and measures to reduce degree of losses.
Discuss
Answer & Solution
Answer: Option D
Solution:
Loss Prevention and Loss Reduction refer to measures to reduce chance of occurrence and measures to reduce degree of losses.
88
Cost of the risk would _________ with the probability and amount of loss
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost of the risk would increase with the probability and amount of loss. Hazard is a condition that increases the chances of a loss arising from a peril. For example, an accident may be the cause of a permanent and total disability.
89
_________ means that insurer would assess and compensate only the exact amount of loss.
Discuss
Answer & Solution
Answer: Option D
Solution:
Indemnity means that insurer would assess and compensate only the exact amount of loss. Indemnity insurance is a contractual agreement in which one party guarantees compensation for actual or potential losses or damages sustained by another party.
90
Proximate Cause refer to the _________ cause which set in motion a chain of events producing loss.
Discuss
Answer & Solution
Answer: Option C
Solution:
A related doctrine is the insurance law doctrine of efficient proximate cause. Under this rule, in order to determine whether a loss resulted from a cause covered under an insurance policy, a court looks for the predominant cause which sets into motion the chain of events producing the loss, which may not necessarily be the last event that immediately preceded the loss. Many insurers have attempted to contract around efficient proximate cause through the use of "anti-concurrent causation" (ACC) clauses, under which if a covered cause and a non-covered cause join together to cause a loss, the loss is not covered.