IC57 FIRE AND CONSEQUENTIAL LOSS INSURANCE - 14
| 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 |