Part II: Multiple choice (2 marks, 0.5 each) (ILOs: A1, B3)

1. Marwa purchased a laptop two years ago that was recently stolen. A similar laptop computer today can be purchased for $1200. Assuming that the laptop was 40 percent depreciated at the time the theft occurred, what is the actual cash value of the loss?

1. $480
2. $720
3. $960
4. $1,200

2. The purpose of a deductible in insurance contracts is/are;

1. Reduce the premium paid by the insured
2. Eliminate small claims that cost too much for the insurer to process
3. Reduce moral and attitudinal hazard
4. All of the above

3. A building owner incurred a $2450 loss followed by a $1220 loss and finally a $2370 loss in the order given, during the current policy period. The policy has a $6,500 annual aggregate deductible. How much will the insurer pay after the final loss?

1. $40
2. $460
3. $0

4. Which of the following is not a contract of indemnity?

1. A property insurance contract
2. A liability insurance contract
3. A life insurance contract
4. A health insurance contract

Part II: Multiple choice (2 marks, 0.5 each) (ILOs: A1, B3)

1. Marwa purchased a laptop two years ago that was recently stolen. A similar laptop computer today can be purchased for $1200. Assuming that the laptop was 40 percent depreciated at the time the theft occurred, what is the actual cash value of the loss?

1. $480
2. $720
3. $960
4. $1,200

2. The purpose of a deductible in insurance contracts is/are;

1. Reduce the premium paid by the insured
2. Eliminate small claims that cost too much for the insurer to process
3. Reduce moral and attitudinal hazard
4. All of the above

3. A building owner incurred a $2450 loss followed by a $1220 loss and finally a $2370 loss in the order given, during the current policy period. The policy has a $6,500 annual aggregate deductible. How much will the insurer pay after the final loss?

1. $40
2. $460
3. $0

4. Which of the following is not a contract of indemnity?

1. A property insurance contract
2. A liability insurance contract
3. A life insurance contract
4. A health insurance contract