3/14/22, 10:20 AM III Exam Series, Licentite Mock Test, Associate Mock Test, Fellowship Exam

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Your Result for Mock Test 08

Result Fail
No of Questions 25
Question Attempted 25
Total Marks 25

Your Marks 3
Percentage Obtained 12%

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Q (1): Which of the following is not an exclusion in Products Liability Policy?

1. Product Guarantee

2. Legal Liability arising of Exported Product (Your answer is correct)

3. Cost of repair of defective product

4. Claims for failure of products to fulfill their purpose.

5. None of the Above

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Q (2): Which of the following is required to support the contract of Insurance in law?

1. Indemnity

2. Contribution

3. Subrogation (Your answer is incorrect)

4. Insurable Interest (This is the correct answer)

5. Privity Conquer

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3/14/22, 10:20 AM III Exam Series, Licentite Mock Test, Associate Mock Test, Fellowship Exam

Q (3): Which of these extensions can be used under Money Insurance cover to insure 'money in till
or on counter' in the insured’s premises during business hours?

1. Money in safe (Your answer is incorrect)

2. Infidelity of employees

3. Riots/Strikes/Terrorism

4. Disbursement risk

5. Money at business counter (This is the correct answer)

Explanation : Money at business counter' is an extension in Money Insurance cover : i. Money in till or
on counter in the insured’s premises during the insured’s business hours, can be covered at an additional
premium. ii. Such cover is generally granted against the risk of hold up. iii. Hold up is theft accompanied by
violence by any person other than an employee of the insured.

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Q (4): With reference to insurance of inland vessels, the inland waters are all sheltered and
protected waters such as harbor waters, back waters, sea water within a radius of_________from
the entrance to harbor/port, river waters and the like.

1. 3 NM

2. 5 NM (Your answer is incorrect)

3. 10 NM

4. 12 NM (This is the correct answer)

5. 15 NM (Nautical Miles)

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Q (5): Mr. Mohit unfortunately met with a car accident and died. The following damage claims were
submitted by his family. Which of these will NOT be payable? 1.Expenses for medical treatment
prior to death 2.Loss of dependency 3.Expenses on funeral

1. All 1, 2 and 3

2. Only 1

3. Only 3 (Your answer is incorrect)

4. Both 1 and 2 only

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5. None of them (This is the correct answer)

Explanation : In case of death, all of the above i.e. Loss of dependency, Funeral expenses & Expenses
for medical treatment prior to death, will be payable.

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Q (6): ___________is a pro-rata reinsurance contract in which the insurer and reinsurer share
premiums and losses according to a fixed percentage.

1. Surplus Treaty (Your answer is incorrect)

2. Pooling arrangement

3. Quota share reinsurance (This is the correct answer)

4. Treaty reinsurance

5. Excess of loss reinsurance

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Q (7): A liability only policy does NOT cover . 1. Any damage to vehicle insured 2. Third party
liability in case of death 3. Third party liability for injuries to body

1. Only 1 (This is the correct answer)

Explanation : The liability only policy covers only the legal liabilities associated with the use of the
vehicle in respect of third party bodily injuries & death. It does not cover damages to the vehicle.

2. Only 1 and 2 (Your answer is incorrect)

3. Only 2 and 3

4. Only 1 and 3

5. All 1,2 and 3

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Q (8): According to the ‘Principle of Insurable Interest’, a person is deemed to have an insurable
interest in the life of his . 1.Relatives 2.Friends 3.Spouse

1. Only 3 (This is the correct answer)

Explanation : According to the ‘Principle of insurable interest’, a person is deemed to have an insurable
interest in life of spouse. The insurable interest
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2. Only 1 (Your answer is incorrect)

3. 1 and 3

4. 2 and 3

5. All 1,2 and 3

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Q (9): As per Plate Glass Insurance, unless specifically stated in the schedule of the policy, glass
means . 1.Plain glass of ordinary glazing quality 2.Glass with embossing, silvering and lettering
3.Glass with ornamental work

1. Only 1 (This is the correct answer)

Explanation : Plate Glass Insurance - Unless specifically stated in the schedule of the policy, glass
means plain glass of ordinary glazing quality and does not include any embossing, silvering, lettering or
ornamental work.

2. Only 3 (Your answer is incorrect)

3. 1 and 2

4. 1 and 3

5. All 1, 2 and 3

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Q (10): During a war, if the contract of carriage is terminated and the goods are discharged short
of destination, what options does the assured have with the goods?

1. Since the goods were discharged short of destination, the assured can send legal notice to the
carriage owner

2. As the war is in force, the goods will remain on the carriage till the war is over (Your answer is

incorrect)

3. The goods may be sold locally or forwarded by some other means to the destination named in the

policy
(This is the correct answer)
Explanation : During a war, if the contract of carriage is terminated and the goods are discharged short
of destination, the goods can be sold locally or forwarded to the destination mentioned in the contract or to
some alternate destination.

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4. The assured can request the carriage owner to buy the goods at a mutually agreed price

5. The ship owner and the assured have to wait for the war to get over and then the goods will be
discharged at the destination

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Q (11): Identify the correct statement with respect to the liability of an insurer in respect of general
average (GA) losses as per Institute cargo clauses.

1. The insurer is liable for all GA losses

2. The insurer is liable for any GA loss only where the GA act was incurred in respect of an insured

peril
(Your answer is correct)
Explanation : The liability of an insurer in respect of general average (GA) losses as per Institute cargo
clauses is that the insurer is liable for any GA loss only if the GA act was incurred in respect of an insured
peril i.e. GA charges incurred to avoid loss from any cause (s) except those excluded.

3. The insurer is only liable up to the value of indemnity as stated in the policy

4. The insurer is liable for part value of the part lost in comparison of the sum insured

5. The insurer is liable for value of the goods insured under the policy

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Q (12): In Health Insurance the final claim with receipted bills, cash memos, claim form and list of
documents as listed in the claim form etc. should be submitted to the company/TPA within
________from the date of completion of treatment.

1. 5 days

2. 10 days

3. 15 days (Your answer is incorrect)

4. 30 days (This is the correct answer)

5. 45 days

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Q (13): Inland Transit clause (B) risk covered are:

1. Collision with vehicle

2. Overturning of vehicle

3. Derailment (Your answer is incorrect)

4. All of the Above (This is the correct answer)

5. None of the Above

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Q (14): Motor Vehicle Act was amended in :

1. 1987

2. 1988 (This is the correct answer)

3. 1986 (Your answer is incorrect)

4. 1990

5. None of the Above

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Q (15): Nigam wants to know the advantages of an Open Cover. Guide him as to which of the
following is the correct option.

1. 1. Open cover is automatic and continuous 2. Savings in administrative costs for both insurer's and

their clients 3. The premium rates are agreed at inception and this assists the insured to identify his
costs of insurance right at the outset
(This is the correct answer)
Explanation : Open cover is an agreement in which the insurer undertakes to insure all the shipments
declared by the assured within the scope if the policy. It’s beneficial to both client & the insurer as the client
doesn’t have to negotiate insurance of each shipment & the insurer is assured of continuity of insurance in
the clients activities.

2. 1. There are many holidays in India and if consignments are to be sent during holidays, it will be

difficult to arrange for the insurance. 2. If any insurance is wrongly taken or not taken by mistake,
corrections cannot be done
(Your answer is incorrect)

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3. 1. There is no compulsion on the insured to insure all the consignments with one insurance company
during a period as he can change the insurance company for each shipment. 2. If any insurance is
wrongly taken or not taken by mistake, corrections cannot be done

4. 1. There is no compulsion on the insured to insure all the consignments. If he wishes he may not insure
at all. 2. If there are many transits during a period of time, it will become very difficult to control
operational part as it is not easy to arrange for many policies before commencement of each transit.

5. In an Open Cover, the rates are also not fixed. They will vary with market conditions etc., and so there
is no certainty that the cover will be granted and at what price.

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Q (16): On Which of the following No Depreciation is imposed?

1. Fiber Glass Components

2. Glass Parts (This is the correct answer)

3. Tyres (Your answer is incorrect)

4. Rubber

5. None of the Above

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Q (17): Shopkeepers insurance policy can be given to – 1.Shops 2.Tea / Coffee shops
3.Restaurants

1. Only 1 (This is the correct answer)

Explanation : Shopkeepers insurance policy is meant for shops only for some maximum sum insured. It
is not to be issued to restaurants, tea/coffee shops.

2. Only 3

3. 1 and 3

4. 1 and 2

5. All 1, 2 and 3 (Your answer is incorrect)

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Q (18): The exclusions under a burglary (business premises) insurance policy include
______________

1. Goods held in trust

2. Stock in trade

3. Tools of trade such as typewriters and calculators (Your answer is incorrect)

4. Loss/Damage discovered at the time of stock taking /checking (This is the correct answer)

Explanation : Loss/Damage discovered at the time of regular stock taking /checking is excluded under a
burglary (business premises) insurance policy.

5. Fixtures and fittings

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Q (19): The 'No claim bonus' is applicable to which of the following policies? 1. Private Car Policy
2. Road risk: Internal risks 3. Road transit risks 4. Motor trade policies

1. Only 1 (This is the correct answer)

Explanation : No claim bonus is applicable to own damage section of the Package policy for Private
cars. No-claim bonus cannot be provided for Motor trade policies, Road transit risks and Road risk Internal
risks policies.

2. Only 2 (Your answer is incorrect)

3. Only 3

4. Only 2 and 4

5. All 1,2,3 and 4

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Q (20): The rate of premium in motor insurance is dependent upon . 1. Commission2. Expenses3.
Claims Costs

1. Only 3

2. Only 1 and 3

3. Only 1 and 2 (Your answer is incorrect)

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5. All 1, 2 and 3 (This is the correct answer)

Explanation : Rating factors are those factors which have direct impact on outgo of insurers. It includes
Claims cost, Commission and Expenses

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Q (21): Under which circumstances the contract of motor insurance does permits the insurer to
avoid its liability? 1.The Driving License is INVALID 2.The motor vehicle has remained unidentified
3.The Vehicle was used for the purpose other than the purpose for which it was insured

1. Only 1

2. Only 3 (Your answer is incorrect)

3. Both 1 and 2

4. Both 1 and 3 (This is the correct answer)

Explanation : Under Section 149 (2), the contract of motor insurance permits the insurer to avoid its
liability in certain circumstances. The circumstances being: 1. ‘Vehicle used for the purpose other than the
purpose for which it was insured’ and 2. ‘Driving license is invalid’.

5. All 1, 2 and 3

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Q (22): What inference can you make from this statement - 'The principle of utmost good faith
applies to personal accident policies in the same manner and with the same force as it applies to
other classes of insurance'.

1. The insurance company should know the number of policies already held with the proposer so that he
does not make undue profits out of insurance

2. When more than one policy is available on the date of loss, each policy will pay the full benefits under

the same
(Your answer is incorrect)

3. The insured is duty bound to disclose all material facts pertaining to the proposed interest. (This is

the correct answer)

Explanation : The principle of utmost good faith applies to personal accident policies in the same
manner and with the same force as it applies to other classes of insurance. The insured is duty bound to
disclose all material facts pertaining to the proposed interest. The details regarding the condition of health
of the life proposed are known best to him only and may not be known to or inferred by the insurers even
after a detailed scrutiny of the proposal form.

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4. A person who has received compensation under the personal accident policy can also claim from any
entity, against which he has a legal right

5. The insured should be in the same pecuniary position as he was prior to the loss

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Q (23): What should the consignee do when goods have arrived by rail and are outwardly damaged
or appear to have been tampered with?

1. Immediately inform the insurer of the damage

2. A claim should be lodged against the carrier within 7 days of delivery

3. Take examined delivery from the Railways and obtain a certificate of damage and /or shortage (Your

answer is correct)
Explanation : When goods have arrived by rail and are outwardly damaged or appear to have been
tampered with the consignee should take an examined delivery and obtain a certificate of damage and /or
shortage from the railways. The consignee must also issue notice of claims against the carrier.

4. To determine the extent of loss, a surveyor has to be appointed

5. The consignee should refuse to take the delivery of the damaged goods

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Q (24): Which are the three broad classifications of Motor Vehicles for the purpose of insurance?

1. Motorcycles, Private cars and Rickshaws

2. Bicycles, Motorcycles and Rickshaws

3. Private cars, Motorcycles and Commercial vehicles (This is the correct answer)

Explanation : The motor vehicles have been classified under 3 categories i.e. Private Cars, Motor
Cycles / Scooters & Commercial Vehicles. Commercial Vehicles are further classified under various
classes depending upon its usages.

4. Private cars, Motorcycles and Tricycles (Your answer is incorrect)

5. Commercial vehicles, Private cars and Bicycles

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Q (25): Which of the following is not a general exclusion for Motor Policy?

1. Accident Outside Geographical Area

2. Used not in accordance with "Limitations as to use "Clause

3. War (Your answer is incorrect)

4. All of the Above

5. None of the Above (This is the correct answer)

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