IC56 Mock Test Sample 6
Fire insurance includes various principles, clauses, and legal provisions to ensure fair claim settlement. Reinstatement value policies provide replacement cost without depreciation, while waiver refers to giving up a known right. Interim payments are made based on surveyor reports. Indemnity may be calculated using market value or production cost depending on the approach. Concepts like underwriting, offer and acceptance, and insurable interest govern contracts. Consumer Protection Act 1986 safeguards policyholders. Clauses like escalation and local authorities cover additional costs. Competence to contract and legal capacity are essential. Exclusions define limits of coverage, while doctrines like caveat emptor emphasize buyer awareness in agreements.
Q1. Under the ________, the payment is the cost of reinstatement or replacement to a new condition.
a) Declaration policy
b) Floater policy
c) Reinstatement value policy
d) Property policy
Q2. __________ is defined as voluntary relinquishment of a known right.
a) Abandonment
b) Repudiation
c) Renunciation
d) Waiver
Q3. Payment made based on interim surveyor report is called:
a) On account payment
b) Interim payment
c) Advance payment
d) Pre-payment
Q4. In case of finished goods, modern method provides real indemnity based on:
a) Market value of goods
b) Cost of production of goods
c) Cost of production plus excise duty
d) Market value with storage cost
Q5. Both parties must have common intention in a contract.
a) True
b) False
Q6. The term _______ refers to principles and practices adopted by insurers for profitable operations.
a) Contract
b) Underwriting
c) Settlement of claims
d) Fire insurance
Q7. Which Act was enacted in 1986 for consumer protection?
a) Grievance Act
b) Consumer Forum Act
c) Ombudsman Act
d) None of these
Q8. An _______ to enter into an insurance contract usually comes from the proposer.
a) Offer
b) Acceptance
c) Cover note
d) Counter-offer
Q9. Calculate Pro-rata Average:
Sum insured = ₹30,000
Value = ₹40,000
Loss = ₹16,000
a) ₹5,000
b) ₹10,000
c) ₹12,000
d) ₹15,000
Q10. Who deals with complaints in personal line insurance up to a certain value?
a) ₹20 lakhs
b) ₹30 lakhs
c) ₹40 lakhs
d) ₹50 lakhs
Q11. __________ depends on benefits derived from property and is measured by replacement cost less depreciation.
a) Value in use
b) Value in exchange
Q12. Which view considers indemnity as net manufacturing cost excluding profit?
a) Traditional view
b) Modern view
Q13. Which clause extends reinstatement cost due to legal requirements?
a) Escalation clause
b) Marine clause
c) Fire clause
d) Local Authorities clause
Q14. Who can insure the property of a minor?
a) Minor
b) Nominee
c) Appointee
d) Guardian
Q15. Cost of repair payable with depreciation only if improvement occurs refers to:
a) Full damage
b) Partial damage
c) Permanent damage
d) None of these
Q16. According to modern view, market value provides real indemnity.
a) True
b) False
Q17. The __________ to effect fire insurance depends on legal capacity and insurable interest.
a) Duty of the person
b) Warranties
c) Competence of a person
d) None of these
Q18. Which statement is correct regarding exclusions in fire policy?
a) Architects and engineers fees are excluded
b) Fees less than 3% are excluded
c) Fees above 3% are excluded
d) Fees are covered up to sum insured
Q19. Which condition provides Marine clause?
a) Condition 1
b) Condition 2
c) Condition 3
d) Condition 4
Q20. Caveat emptor means:
a) Let the buyer be aware
b) Let the seller be aware
