Chapter Exam

Chapter 15: Insurance — Online MCQ Test

Q: The principle that requires both parties to disclose all material facts honestly is called:

Answer: C. Utmost good faith — Utmost good faith means the insured and insurer must disclose all important facts fully and honestly.

Q: A shop owner insures the stock in his shop against loss by fire. This is an example of:

Answer: B. Fire insurance — Fire insurance covers losses caused by fire to property such as buildings, stock, and machinery.

Q: Which statement is correct about fire insurance?

Answer: B. It is a contract of indemnity — Fire insurance compensates for the actual loss suffered, so it follows the principle of indemnity.

Q: A policyholder wants insurance that provides payment to nominees after his death and is not based on actual financial loss. Which insurance is appropriate?

Answer: C. Life insurance — Life insurance provides a sum assured on death or maturity and does not operate on the indemnity principle.

COMMERCE · CLASS 11th · Tamil Nadu State Board

Practice Chapter 15: Insurance with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 11th COMMERCE. This chapter covers: This chapter introduces risk management and fundamental insurance principles. Students study indemnity utmost good faith insurable interest life marine and fire insurance types alo.... AI-generated questions from basic to board-exam level, with instant results and explanations.

Questions

20m

Time Limit

Attempts Left

10 random questions from this chapter (mixed difficulty)
Questions you've seen before won't repeat until the pool resets
You have 20 minutes — exam auto-submits when time is up
Maximum 3 attempts per chapter
Results and explanations shown immediately after submission

New here? Register free — includes 3 free chapter exams.

Chapter 15: Insurance — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 11th COMMERCE — Chapter 15: Insurance, with answers and explanations. These are sample questions; the exam has its own separate question set.

What is insurance?

A. A method of making quick profit
B. A way of transferring risk from one person to an insurance company ✓
C. A form of saving only for future investment
D. A tax paid to the government

Answer: B. A way of transferring risk from one person to an insurance company
Insurance is a device for transferring risk from the insured to the insurer in return for a premium.

The principle that requires both parties to disclose all material facts honestly is called:

A. Indemnity
B. Insurable interest
C. Utmost good faith ✓
D. Contribution

Answer: C. Utmost good faith
Utmost good faith means the insured and insurer must disclose all important facts fully and honestly.

A shop owner insures the stock in his shop against loss by fire. This is an example of:

A. Life insurance
B. Fire insurance ✓
C. Marine insurance
D. Reinsurance

Answer: B. Fire insurance
Fire insurance covers losses caused by fire to property such as buildings, stock, and machinery.

Which statement is correct about fire insurance?

A. It covers only life-related risks
B. It is a contract of indemnity ✓
C. It always gives fixed payment regardless of loss
D. It does not require insurable interest

Answer: B. It is a contract of indemnity
Fire insurance compensates for the actual loss suffered, so it follows the principle of indemnity.

A policyholder wants insurance that provides payment to nominees after his death and is not based on actual financial loss. Which insurance is appropriate?