IC56 Mock Test Sample 4
Fire insurance claims often involve disputes over claim value, delays, or repudiation, prompting policyholders to seek legal help. Policies include time limits (typically 12 months) for claim enforcement. Concepts like contribution, independent liability, and excess guide claim calculation and sharing. Salvage and residue refer to remaining property after loss, with value influenced by quantity, quality, and reuse. Specialized policies are needed for high-risk or commercial properties. Consumer disputes commonly arise due to delays or disagreements. Principles like burden of proof and fairness in claim settlement are crucial. Standardized methods like DISAFER ensure uniform loss assessment, while insurers may cancel policies with proper notice.
Q1. Why might a policyholder seek legal assistance in a fire insurance claim?
a) To negotiate lower premiums
b) To resolve disputes over claim value
c) To find a new insurance company
d) To increase their policy coverage
Q2. In no case whatsoever shall the company be liable after the expiration of ___________ from the beginning of the loss unless under pending action or arbitration.
a) 6 months
b) 12 months
c) 24 months
d) 36 months
Q3. Which of the following features of ex-gratia payments must be noted?
a) Made after consultation with co-insurers
b) Not recoverable from reinsurers unless provided
c) Paid as a percentage and requires Board approval
d) All of the above
Q4. The liability of insurers independently assessed is referred to as:
a) Pro-rata average
b) Rateable
c) Subrogation
d) Contribution
Q5. Under the principle of Contribution, calculate the claim payable (Total = ₹4,500):
a) X = ₹2,500, Y = ₹2,000
b) X = ₹3,500, Y = ₹1,000
c) X = ₹1,500, Y = ₹3,000
d) X = ₹1,000, Y = ₹3,500
Q6. Which refers to variation in classification or designation of property in accounts?
a) Escalation clause
b) Designation of property clause
c) Contract price clause
d) Marine clause
Q7. Property that escapes destruction or damage is known as:
a) Residue
b) Salvage
c) Excess
d) Reclamation
Q8. Which factors influence salvage value?
a) Loss of quantity
b) Deterioration in quality
c) Alternative uses
d) All of the above
Q9. Most fire claim disputes fall under which category?
a) Delay in settlement
b) Repudiation of claim
c) Dispute over quantum of loss
d) All of the above
Q10. If a complainant fails to comply with National Commission orders, punishment may include:
a) Imprisonment
b) Fine
c) Both imprisonment and fine
d) Decision by Supreme Court
Q11. Which properties may require specialized fire insurance policies?
a) Low-risk properties
b) Residential properties only
c) Commercial/industrial and high-risk homes
d) Properties with no fire hazards
Q12. What additional risks does comprehensive business insurance cover?
a) Only fire accidents
b) Natural disasters
c) Employee injuries
d) Both natural disasters and employee injuries
Q13. Identify Non-Concurrent Policies:
- Policy X – Cotton bales
- Policy Y – Cotton bales and Kuppas
- Policy Z – Cotton bales, Kuppas, loose cotton
a) Policy X and Policy Y
b) Policy X and Policy Z
c) Policy Y and Policy Z
d) All policies
Q14. What is the most important function of an insurance organization?
a) Underwriting
b) Settlement of claims
c) Consideration
d) Remuneration
Q15. Rakesh’s property value = ₹40,000, insured for ₹30,000, loss = ₹40,000. Claim payable?
a) ₹22,500
b) ₹30,000
c) ₹40,000
d) ₹25,000
Q16. As per Condition 5, insurer can terminate policy with ______ days’ notice.
a) 5
b) 7
c) 10
d) 15
Q17. In State Commission, claim amount payable is:
a) ₹5 lakhs
b) ₹10 lakhs
c) More than ₹5 lakhs but less than ₹20 lakhs
d) Exceeds ₹20 lakhs
Q18. Onus of proof is also known as:
a) Wording of proof
b) Burden of proof
c) Terms of proof
d) Evidence of proof
Q19. DISAFER rule standardizes loss computation methodology.
a) TRUE
b) FALSE
Q20. Minimum amount deducted from every claim is called:
a) Loss or damage
b) Destruction
c) Exclusions
d) Excess
