OBJECTIVES

The principle of insurance that requires the insured to disclose all material facts about what is insured is called…

•  Indemnity
• Utmost good faith.
• Proximate cause.
• Insurable interest

Mukasa insured his stock against theft for Shs 50,000. His stock increased by Shs 60,000 but did not change his insurance cover. Thieves stole stock worth shs 40,000. How much will be compensated to Mukasa?

• 33,333            
• 50,000
• 18,182
• 60,000

An insurer can reduce the financial liability on property which is expensive to insure by

A) Increasing premium                        C) over-insuring

B) Under-insuring                                  D) Re-insuring

Sum Insured refers to

A) number of properties insured

B) value of property insured

C) total amount of compensation received

D) total number of risks insured.

Okello insured his car against an accident for shs. 4.000.000. He then had an accident. Before the accident value of the car was shs. 3.000.000. The wreck was valued at shs. 400.000. If Okello chose to keep the wreck, how much was he compensated?

Shs. 400.000

Shs. 2.600.000

Shs. 3.000.000

Shs. 3.400.000

……..is the insurance that against events that may or may not happen

A. Insurance        B.  Cover note            C.      Assurance    D.      Policy

Musa over valued his property while taking up an insurance policy which  principle of insurance     did he violate?

A. Utmost goods faith          B.       Insurable interest

C. Subrogation                    D.      Proximate cause

The regular payment an insured makes for insurance cover is called.

A) premium                                          B) sum insured

C) surrender value                              D) Brokerage

A business man has stock worth shs 8,000,000 and insures it for shs 4,800,000 against fire. If half of the stock is destroyed by fire, how much will the business be compensated?

A) shs 2,400,000.

B) Shs 4,000,000

C) Shs 4, 800,000

D) Shs, 6,400,000

Which insurance policy would provide cover of goods stolen by factory workers?

a. woman’s compensation       b.   Public liability.

c.  Fidelity guarantee.               d.      Pilferage

The principle of utmost good faith in insurance states that

a) The insured who suffers loss should be compensated

b) The insured should reveal all the necessary information about the property when applying for an insurance policy.

c) There must be a close relationship between the risk insured and the cause of the loss suffered.

d) The insurer takes ownership of the scrap of the destroyed property.

The sum insured refers to the

a) Valve of property insured

b) Number of properties insured

c) Total amount of compensation received

d) Total number of risks insured

A principle of insurance where the insured must suffer financial loss is called

a)Utmost good faith                                b) Proximate cause

c) Insurable Interest                               d) Subrogation

One of the principles of insurance which requires the insured to surrender the scrap after full compensation has been met is.

A. indemnity                                                   B.   Ut most good faith                            C. Subrogation                                               D.  Insurable interest

The insurance policy which covers both the ship and goods on board is called;

A. Voyage policy                                          B. Floating policy

C. Marine Cargo Policy                             D. Marine hull policy

The money paid back to the insured when he decides to cancel the Insurance policy before the period specified is

A. contribution                                              B. surrender value

C. sum insured                                              D. No claim bonus

Kato insured his new car for shs 12,000,000.  By the time an accident occurred it was valued at 9,000,000 shs and the residual value was at shs 1,200,000. if Kato opted not to  take the  residual value, how much would he obtain from t he insurance company.

A. Shs 7,800,000                                        B. Shs 1,000,000

C. Shs 9,000,000                                       D. Shs 10,800,000

The practice where valuable goods are insured by more than one insurance company is called

A. re-insurance                                            B. co-insurance

C. over insurance                                        D. under insurance

Assessors in the insurance are responsible for

a) Determining the premium

b) Taking the scrap of the destroyed assert

c) The calculation of the sum insured

d) Estimating the extent of damage and the value of compensation.

A principle of insurance where the insured must suffer the final loss is called

A. Utmost good faith

B. Proximate cause

C. Insurable interest

D. Subrogation

Mwogezi insured his stock at shs 700,000, but the correct value of his stock was shs 1000,000. A fire destroyed part of his stock valued at shs 600,000. How much did the insurance Company pay as compensation to Mwogezi?

A. Shs  420,000

B. Shs  600,000

C. Shs 180,000

D. Shs  400,000

Define the term insurance and describe the principles of insurance.

(a) Define the following terms as used in insurance

a) Insured

b) Insurer

c) Premium

d) Sum insured

e) Risk

f) Loss

g) Co-insurance

h)  Surrender value

i) Actuary

j) Over insurance

k) Pooling of risk

l) Explain the different types of insurance

(a) Define the term insurance contact

(b) Describe the steps followed when

1. Taking out an insurance policy.
2. claiming compensation
3. Explain the responsibilities of insurance companies to the business communities.

(c) Describe the categories of insurance policies.

(a) Explain the challenges facing the insurance industry in Uganda.

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