IC57 FIRE AND CONSEQUENTIAL LOSS INSURANCE - 14

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Q1.What is the difference between Fire policy and Reinstatement value policy?
   A Fire policy works on the principle of historical costs where as Reinstatement value policy works on the indemnity principle
  A Fire policy operates strictly on the principle of indemnity whereas, in a reinstatement policy, the principle is modified
  The principle of indemnity may or may not be the fundamental principle under the Reinstatement policy but it has to be under a fire policy
   Reinstatement value policy operates strictly on the principle of indemnity which is not the case in fire policies
  The principle of indemnity may or may not be the fundamental principle under the fire policy but it has to be under the Reinstatement value policy
 
Q2.PPP Ltd. an insurer thinks that during the process of filling up the proposal form, it is not important to state the basis of insurance. These details can be given separately later on. Is PPP Ltd. right?
   Yes, PPP Ltd. is right
   Cannot say as this differs from proposal to proposal
   PPP Ltd. is partially right as some details can be given later
   It depends on the IRDAI rule at the time filling up the form
  No, PPP Ltd. is wrong as it is important to mention the basis, market value, or reinstatement value in the proposal form
 
Q3.Choose the CORRECT option with respect to the Specification section of a policy.
  Definitions are a part of the specification
  Definitions are NOT a part of the specification
  Auditors fees are NOT included in the specifications
   Wages are NOT included in the specifications
 
Q4.Rohan is the owner of a retail shop and is interested in knowing the 'class of occupancy' of a retail shop on the basis of fire load. Guide him -
   Retail shops are classified under 'Low fire load'
   Retail shops are classified under 'Moderate fire load'
   Retail shops are classified under 'High fire load'
   Retail shops are classified under 'Super Hazard fire load'
   Retail shops are classified under 'Intense fire load'
 
Q5.Mr. Sumeet wants to have clear spaces and gangways in his store room so that this would reduce fire hazards. Is this view correct?
  Mr. Sumeet is correct as such arrangement is a good practice of housekeeping
   Mr. Sumeet is correct as such arrangement would reduce the contributory hazard
   Mr. Sumeet is correct as such arrangement would reduce the inception hazard
   The view of Mr. Sumeet is incorrect as such arrangement would increase fire risk
  The view of Mr. Sumeet is incorrect as such arrangement would make fire fighting very difficult in case of fire erupts in the store room
 
Q6.Which of the following is TRUE for Legal and Auditing charges?
   They are examples of Variable expenses
   They can also be covered under fire policy if the insurer gives a 'no objection'
   They are examples of Standing Charges
   They are not included in the Loss of Profit policies
   They are outside the purview of insurance coverage’s
 
Q7.In 'Details of Property' in the Fire Proposal form, which of the below-mentioned detail should be mentioned?
   Whether Add-on covers required
   Period of insurance
   Whether Plinth and foundation to be covered along with the building
   Fire Protection devices
   Claim details
 
Q8.Give your suggestion to the two parties in an insurance contract who want to settle a dispute by going for litigation instead of going for arbitration.
   The parties can go ahead with litigation as it will be less expensive
   The parties should not go ahead with litigation as that will be more expensive
   Both litigation and arbitration are not allowed under the Insurance Act 1938
   Both litigation and arbitration are not allowed under the IRDAI guidelines
   Only high courts having jurisdiction in insurance disputes
 
Q9.The ‘Difference Basis’ of the specification is a ____.
   simpler method but also has many disadvantages
   simpler method and has several advantages
   simpler method but can be used only if the insured amount is not large
   simpler method but cannot be used by a manufacturer
  the complex and difficult method
 
Q10.Identify the correct option with respect to Indemnity Period :
   The choice of indemnity period would be mainly influenced by the quality of the damaged asset
   The choice of indemnity period would be mainly influenced by the quality of the new asset to be installed
   The choice of indemnity period would be mainly influenced by the amount of sum insured
   The choice of the indemnity period would be mainly influenced by the time that would be taken for reinstatement of the asset
   The choice of indemnity period would be mainly influenced by the amount of expected premium

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