Page 312 - IC38 GENERAL INSURANCE

Answers to Test Yourself

Answer 1

The correct option is II.
Stolen goods violate the principle of legality and hence do not represent an
insurable risk.

Answer 2

The correct option is II.
Coercion is not an element of a valid contract.

Answer 3

The correct option is III.
The horse riding accident set things in motion that eventually resulted in Mr
Pinto‟s death and hence it is the proximate cause.

Self-Examination Questions

Question 1

Moral hazard means:

I. Dishonesty or character defects in an individual
II. Honesty and values in an individual
III. Risk of religious beliefs
IV. Hazard of the property to be insured

Question 2

Risk indicates:

I. Fear of unknown
II. Chance of loss
III. Disturbances at public place
IV. Hazard

Question 3

______________ means spreading one‟s investment in different kinds of assets.

I. Pooling
II. Diversification
III. Gambling

306