IC56 Mock Test Sample 1
Fire insurance claims involve multiple challenges such as fraud, delays, and inadequate documentation. After a loss, the insured must promptly notify and submit a written claim (typically within 15 days as per policy conditions). Loss assessment, especially partial loss, can be complex due to repair cost disagreements. Insurers have rights to inspect premises and assess damage. Claims are governed by principles like indemnity, proximate cause, and policy interpretation rules. Legal frameworks include the Indian Contract Act and Consumer Protection Act (1986). Proper valuation, documentation, and evidence are essential for timely settlement. Coverage includes perils like fire, explosion, and bush fire, ensuring financial protection against losses.
Q1. What is another common challenge in fire insurance claims besides disputes?
a) Policy cancellations
b) Fraudulent claims
c) Delays in processing
d) Lack of documentation requirements
Q2. As per Condition 6 of the fire insurance policy, the insured shall with __________ after the loss, submit a claim in writing for the loss.
a) 3 days
b) 7 days
c) 10 days
d) 15 days
Q3. The assessment of ________ on a building is sometimes more difficult than the assessment of a total loss, because of disagreements over both the extent of the repairs and their cost.
a) Partial loss
b) Deterioration
c) Reconstruction
d) None of these
Q4. Under which condition do insurers have the right to enter and keep possession of the insured premises where there is a loss?
a) Condition 6
b) Condition 7
c) Condition 8
d) Condition 9
Q5. Which of the following are rules of construction?
a) A written document must be construed as a whole and words and phrases must not be constructed in isolation
b) If a proposal is expressly incorporated in a policy, both should be read together
c) The intention of the parties must prevail and be ascertained from the written agreement
d) All of the above
Q6. Fire insurance contracts are governed by:
a) Indian Contracts Act 1872
b) Common Law
c) Both a and b
d) Only a
Q7. What is defined as the voluntary relinquishment of a known right?
a) Waiver
b) Estoppel
c) Without prejudice
d) None of these
Q8. Which proviso states that reinstatement work must be carried out with reasonable dispatch and within time limits?
a) Proviso 1
b) Proviso 2
c) Proviso 3
d) Proviso 4
Q9. __________ is determined by what a buyer will pay for the property or cost to buy similar property at the current price.
a) Value in use
b) Value in exchange
c) Market depreciation
d) None of these
Q10. What are common reasons for delayed fire insurance claim settlements?
a) Lack of clarity in incident reporting
b) Inadequate supporting evidence
c) Improper documentation
d) None of the above
Q11. The Consumer Forum Act was enacted in:
a) 1978
b) 1986
c) 1995
d) 1999
Q12. Salvage may be sold at a __________ to the highest bidder after inviting offers.
a) Private sale
b) Sale by Tender
c) Through the Insured
d) By public opinion
Q13. The valuation for indemnity purposes of __________ destroyed at the manufacturer’s premises is difficult.
a) Finished goods
b) Stock-in-purchases
c) Raw materials
d) None of these
Q14. The principle where the peril need not be the immediate cause but must be connected through a chain of events refers to:
a) Insured perils
b) Excluded perils
c) Both of the above
d) None of these
Q15. Missile testing operations are conducted by:
a) IRDA
b) RBI
c) Government of India
d) SEBI
Q16. This peril is included so that damage is covered even without ignition because otherwise it would not be covered:
a) Fire
b) Explosion
c) Lightning
d) Strike
Q17. Which of the following is correct about Fire policy?
a) Covers only forest fire
b) Covers both bush fire and forest fire
c) Covers bush fire but excludes forest fire
d) None of these
Q18. Proofs and information as required by the company must be submitted.
a) True
b) False
Q19. What is the key difference between named-peril and all-risk policies?
a) Coverage for specific perils vs. all perils
b) Natural vs. man-made disasters
c) Residential vs. commercial properties
d) Fire vs. water damage only
Q20. How is the claim amount calculated under average clause?
Sum insured = ₹40,000
Value of property = ₹60,000
Loss = ₹20,000
a) ₹8,000
b) ₹13,333.33
c) ₹16,000
d) ₹20,000
