Coinsurance and Pro Rata
Coinsurance and Pro Rata Quiz
Test your knowledge of coinsurance and pro rata concepts with this engaging quiz! Discover how well you understand the principles that govern insurance policies and how claims are handled.
With 10 challenging questions, you'll learn important information about:
- Coinsurance clauses
- Policy limits
- Pro Rata principles
Coinsurance is...
The transfer of risk.
An agreement between an insurance company and a policy holder to share the cost of a claim.
The amount of the loss which the insured is responsible to pay before benefits from the insurance company are payable.
The cause of a possible loss.
Sam's home is worth $1 million and his homeowners policy has a 80-percent coinsurance clause. What is the minimum Sam can insure his home without being penalized by the coinsurance clause?
$900,000
$750,000
$800,000
$400,000
Ralph's bachelor pad is valued at $100,000, his policy has a coinsurance clause of 90-percent. He signed up for a policy with a $90,000 limit, has Ralph satisfied the needs of the coinsurance clause?
Yes
No
Ralph's bachelor pad is valued at $100,000, his policy has a coinsurance clause of 90-percent. He signed up for a policy with a $90,000 limit, later on in the year his pad has a small fire and $10,000 of damage occurs. How much will his insurance pay for his loss?
None
$5,000
$9,000
$10,000
Tina's spot is valued at $100,000, her policy has a coinsurance clause of 90-percent and Tina's policy has a $45,000 limit. Tina's spot is damaged after a water heater broke, causing her to submit a claim for $20,000 of damage. How much would her insurance pay for her claim?
None
$10,000
$20,000
$45,000
If a loss occurs that is covered by more than 1 insurance policy that was purchased by the insured, then each policy pays a portion of the loss that is proportional to the amount of that policy. What is this called?
Coinsurance
Deductible
Pro Rata
Sharing is caring
You want to insure a building for $1,000,000, but, for underwriting reasons, the maximum amount that you can purchase from 2 insurance companies is $750,000 from Statefarm and $250,000 from Farmers, so you purchase the 2 policies with the maximum limits.
If you suffer a $200,000 loss, then Statefarm will pay __ and Farmers will pay __.
25%; 75%
75%; 25%
50%; 50%
25%; 25%
Pro rata helps protects the principle of...
Insurance
Law
Indemnity
Relativity
You want to insure a building for $2 Million, but, for underwriting reasons, the maximum amount that you can purchase from 2 insurance companies is $1 Million from Statefarm and $1 Million from Farmers, so you purchase the 2 policies with the maximum limits. If you suffer a $500,000 loss, then Statefarm will pay __ and Farmers will pay __.
$250,000; $250,000
$200,000; $300,000
$300,000; $200,000
$500,000; $0
You insure a mobile home with 2 difference insurance companies, your limit with Statefarm is $75,000 and your limit with Geico is $25,000. You suffer a $5,000 loss, how much will Statefarm pay?
$5,000
$0
$3,750
$2,500
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