ICSE Class 10

General instructions: Answer all questions. Marks are shown in brackets [ ].

Objective

1. 1.
   Identify the principle of insurance based on the given information : 1. The insurer takes on the insured's rights after paying the claim. 2. This helps the insurer recover the loss amount from a third party responsible for the damage.

   1. A. Subrogation
   2. B. Contribution
   3. C. Insurable interest
   4. D. Indemnity
   [1]
2. 2.
   Changes in fashion is an example of ______ risk.

   1. A. Calculated
   2. B. Insurable
   3. C. Non-insurable
   4. D. Inevitable
   [1]
3. 3.
   Which key insurance term refers to periodic payments made by the policyholder for coverage to remain active?

   1. A. Nominee
   2. B. Premium
   3. C. Underwriter
   4. D. Policy
   [1]
4. 4.
   Why is the principle of utmost good faith critical in an insurance contract?

   1. A. It allows the insurer to void the contract if the proposer conceals or misrepresents material facts.
   2. B. It ensures the insured receives compensation even if facts are withheld.
   3. C. It mandates that the insurer must verify all facts independently.
   4. D. It requires the insured to pay higher premiums for full disclosure.
   [1]
5. 5.
   When discussing life vs. general insurance, which statements match the text? I. Life insurance compensates upon the event of the policyholder's death or maturity. II. General insurance offers coverage against health, fire, and marine perils. III. Life insurance is indefinite indemnity for property damage. IV. General insurance includes actual-loss compensation for non-life risks.

   1. A. I, II, and IV are true
   2. B. II, III, and IV are true
   3. C. I and III are true
   4. D. I and II are true
   [1]
6. 6.
   It implies that after indemnifying the insured for his loss, the insurer becomes entitled to all the rights and remedies relating to the property insured.

   1. A. Doctrine of Subrogation
   2. B. Utmost Good Faith
   3. C. Mitigation of Loss
   4. D. Indemnity
   [1]
7. 7.
   Ms. Kavita insured her shop for ₹20 lakhs against theft. The shop was robbed, and she claimed the full insured amount. The insurer compensated her only ₹1.5 lakhs, the actual value of the stolen items. Why did the insurer not pay the full insured amount?

   1. A. The insurer made an error in calculation.
   2. B. Compensation is limited to the actual loss suffered.
   3. C. The policy had a maximum payout limit of ₹1.5 lakhs.
   4. D. The insurer refused to pay the full amount arbitrarily.
   [1]
8. 8.
   Which principle of insurance requires both the insurer and insured to disclose all material facts honestly?

   1. A. Indemnity
   2. B. Utmost Good Faith
   3. C. Contribution
   4. D. Causa Proxima
   [1]
9. 9.
   Mr. Verma purchased a fire insurance policy for his factory worth ₹50 lakhs. After a fire destroyed the factory, the insurer discovered that Mr. Verma was only leasing the property and did not own it. As a result, the insurance company rejected his claim. Why did the insurance company reject Mr. Verma’s claim?

   1. A. The insurer found the fire was caused by Mr. Verma’s negligence.
   2. B. Mr. Verma lacked legal ownership or financial interest in the factory.
   3. C. The policy had expired before the fire occurred.
   4. D. The factory was insured for less than its actual value.
   [1]
10. 10.
    Ms. Kavita insured her shop and inventory for ₹30 lakhs, but a burglary caused losses of ₹50 lakhs. The insurer offered compensation lower than ₹30 lakhs. Which principle limits her compensation?

    1. A. Principle of Contribution
    2. B. Principle of Indemnity
    3. C. Principle of Subrogation
    4. D. Principle of Causa Proxima
    [1]