JSS 1 Business Studies Flashcards: Principles, Terms and Risks in Insurance

Question 1

The payment made for insurance cover is called what?

Accepted Answer

premium

Question 2

The document that states an insurance contract is the ____.

Accepted Answer

policy

Question 3

The event that directly causes an insured loss is the ____.

Accepted Answer

peril

Question 4

A promise in an insurance contract that must be observed is a ____.

Accepted Answer

warranty

Question 5

What is risk in insurance?

Accepted Answer

the possibility of loss

Question 6

An applicant must reveal every fact that could influence the insurer's decision. This is ____.

Accepted Answer

utmost good faith

Question 7

A person may insure a shop only if its loss would affect that person financially. Name the principle.

Accepted Answer

insurable interest

Question 8

A claim should compensate the actual loss, not create profit. The governing principle is ____.

Accepted Answer

indemnity

Question 9

After paying a claim, the insurer pursues the person who caused the loss. This right is ____.

Accepted Answer

subrogation

Question 10

To decide a claim, the insurer identifies the dominant effective cause. Name the principle.

Accepted Answer

proximate cause

Question 11

Two insurers cover the same warehouse and share one valid loss. The principle applied is ____.

Accepted Answer

contribution

Question 12

What makes a risk insurable?

Accepted Answer

its loss can be measured and occurs by chance

Question 13

Why is deliberate damage by the insured uninsurable?

Accepted Answer

the loss is intentional

Question 14

Ordinary business price fluctuation is usually what kind of risk?

Accepted Answer

uninsurable risk

Question 15

A fire that may or may not occur is what kind of risk?

Accepted Answer

insurable risk

Question 16

Why are premiums pooled?

Accepted Answer

to pay the losses of affected policyholders

Question 17

What must an insured person do when making a claim?

Accepted Answer

report truthfully and provide evidence

Question 18

Why are some insurances compulsory by law?

Accepted Answer

to protect the public and accident victims

Question 19

A Nigerian driver must hold at least ____ motor insurance.

Accepted Answer

third-party motor insurance

Question 20

What happens when material facts are concealed?

Accepted Answer

the claim or policy may be invalidated

Strong work.