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1. What is the primary purpose of motor vehicle insurance?

A) To increase vehicle prices
B) To provide financial protection against accidents and damages
C) To increase government revenue
D) To regulate fuel consumption

Answer: B) To provide financial protection against accidents and damages


2. Which type of motor vehicle insurance is mandatory in India?

A) Third-party insurance
B) Comprehensive insurance
C) Zero depreciation insurance
D) Personal accident cover

Answer: A) Third-party insurance


3. Under which act is motor vehicle insurance mandatory in India?

A) Motor Vehicles Act, 1988
B) Road Safety Act, 1999
C) Insurance Regulation Act, 2002
D) National Transport Act, 2010

Answer: A) Motor Vehicles Act, 1988


4. What does third-party insurance cover?

A) Damage to the insured vehicle
B) Injury or damage to third-party property or persons
C) Personal losses of the vehicle owner
D) Engine protection

Answer: B) Injury or damage to third-party property or persons


5. Comprehensive motor insurance covers:

A) Only third-party damages
B) Only damages to the insured vehicle
C) Both third-party damages and own vehicle damages
D) None of the above

Answer: C) Both third-party damages and own vehicle damages


6. What does "No Claim Bonus" (NCB) mean in motor insurance?

A) A discount on premium for not making claims
B) A penalty for not renewing insurance
C) A mandatory government tax
D) A refund policy by insurers

Answer: A) A discount on premium for not making claims


7. What is the tenure of a long-term third-party insurance policy for new private cars as per IRDAI guidelines?

A) 1 year
B) 2 years
C) 3 years
D) 5 years

Answer: C) 3 years


8. What is the purpose of Personal Accident (PA) Cover in motor insurance?

A) Covers damage to third-party property
B) Provides financial compensation to the vehicle owner/driver in case of injury or death
C) Reduces the insurance premium
D) Covers fuel expenses

Answer: B) Provides financial compensation to the vehicle owner/driver in case of injury or death


9. Which regulatory body governs motor vehicle insurance in India?

A) SEBI
B) IRDAI
C) RBI
D) NHAI

Answer: B) IRDAI (Insurance Regulatory and Development Authority of India)


10. If a vehicle owner does not have valid motor insurance, they can be fined up to:

A) ₹500
B) ₹1000
C) ₹2000 for the first offense and ₹4000 for repeat offenses
D) ₹10,000

Answer: C) ₹2000 for the first offense and ₹4000 for repeat offenses


11. What does "zero depreciation" cover in motor insurance?

A) Full coverage for repair costs without considering depreciation
B) Only third-party damages
C) Full refund on insurance cancellation
D) Exemption from road tax

Answer: A) Full coverage for repair costs without considering depreciation


12. What is "own damage" (OD) cover in a motor insurance policy?

A) Covers damages to third-party property
B) Covers damages to the insured vehicle due to accidents, fire, or theft
C) Covers only natural calamities
D) Covers damages caused due to illegal driving

Answer: B) Covers damages to the insured vehicle due to accidents, fire, or theft


13. What is "deductible" in motor insurance?

A) The discount given by the insurer
B) The amount the policyholder must pay before the insurance company covers the remaining expenses
C) A penalty for making frequent claims
D) A tax imposed on insurance companies

Answer: B) The amount the policyholder must pay before the insurance company covers the remaining expenses


14. In case of a stolen vehicle, what is the claim amount based on?

A) Original showroom price
B) Market value at the time of theft
C) The insured declared value (IDV)
D) The cost of a similar new vehicle

Answer: C) The insured declared value (IDV)


15. What is the maximum period within which an accident claim must be reported to the insurer?

A) 7 days
B) 15 days
C) 30 days
D) As per the policy terms

Answer: D) As per the policy terms

1. What is the primary purpose of fraud detection in motor insurance?

A) To reduce the policyholder's premium
B) To prevent insurance companies from losing money due to false claims
C) To increase the number of insurance policies sold
D) To eliminate insurance policies

Answer: B) To prevent insurance companies from losing money due to false claims


2. Which of the following is considered a common type of motor insurance fraud?

A) Overstating the value of a vehicle during a claim
B) Falsifying the accident location
C) Staging an accident
D) All of the above

Answer: D) All of the above


3. What is the role of "claim investigation" in fraud detection?

A) To pay out the claims as quickly as possible
B) To verify the authenticity of a claim before approval
C) To increase the claim amount
D) To avoid paying out any claims

Answer: B) To verify the authenticity of a claim before approval


4. Which of the following methods is commonly used to detect fraudulent claims in motor insurance?

A) Checking the claim history of the policyholder
B) Analyzing discrepancies in the accident report
C) Investigating the accident location using GPS data
D) All of the above

Answer: D) All of the above


5. "Staged accidents" in motor insurance fraud refer to:

A) Genuine accidents that occur on the road
B) Accidents that are deliberately created to make fraudulent claims
C) Accidents that involve only third-party vehicles
D) Accidents caused by natural calamities

Answer: B) Accidents that are deliberately created to make fraudulent claims


6. In case of a fraudulent claim, who is generally held responsible?

A) The policyholder
B) The insurance company
C) The insurance agent
D) Both the policyholder and the third party involved

Answer: A) The policyholder


7. Which of the following can be an indicator of a potential fraudulent claim?

A) The claimant is unwilling to cooperate with the investigation
B) A lack of witness testimony
C) Claims made for damages to an uninsured vehicle
D) All of the above

Answer: D) All of the above


8. What is the role of data analytics in detecting motor insurance fraud?

A) To track the policyholder’s driving habits
B) To compare claims data for patterns of suspicious behavior
C) To adjust premiums based on vehicle age
D) To provide weather reports for the claim

Answer: B) To compare claims data for patterns of suspicious behavior


9. How do fraudulent insurance agents contribute to motor insurance fraud?

A) By issuing policies for vehicles that do not exist
B) By altering policy details for personal gains
C) By helping create fake claims
D) All of the above

Answer: D) All of the above


10. What is the consequence for someone caught committing motor insurance fraud?

A) A warning from the insurance company
B) A fine and possible legal action
C) Suspension of their driving license
D) Cancellation of their policy with no further consequences

Answer: B) A fine and possible legal action


11. Which of the following is a red flag for motor insurance fraud?

A) A policyholder consistently files claims for minor damages
B) An unusually high number of claims within a short period
C) Claims for repairs from unregistered workshops
D) All of the above

Answer: D) All of the above


12. What is the impact of motor insurance fraud on the industry?

A) It increases the premiums for honest policyholders
B) It results in lower insurance coverage
C) It reduces insurance policy sales
D) It has no impact on the industry

Answer: A) It increases the premiums for honest policyholders


13. Which technology is increasingly being used to combat motor insurance fraud?

A) Blockchain
B) Artificial Intelligence (AI) and Machine Learning (ML)
C) Augmented Reality (AR)
D) None of the above

Answer: B) Artificial Intelligence (AI) and Machine Learning (ML)


14. What is "claim padding" in motor insurance fraud?

A) Filing multiple claims for the same incident
B) Overstating the value of vehicle repairs or damages
C) Deliberately causing an accident
D) Insuring a stolen vehicle

Answer: B) Overstating the value of vehicle repairs or damages


15. Which legal framework is used to address and prevent insurance fraud in India?

A) Consumer Protection Act, 2019
B) Insurance Regulatory and Development Authority of India (IRDAI) Guidelines
C) Indian Penal Code (IPC), sections related to fraud
D) Both B and C

Answer: D) Both B and C

1. What is the first step in the claims process after an accident?

A) Filing a report with the police
B) Contacting the insurance company
C) Taking the vehicle to a repair shop
D) Reporting the accident to a third-party insurer

Answer: B) Contacting the insurance company


2. What is required for initiating a motor insurance claim in case of an accident?

A) Police FIR (First Information Report)
B) Claim form submission
C) Vehicle inspection report
D) All of the above

Answer: D) All of the above


3. What does the insurance company assess during the claim process?

A) The severity of the damage
B) The cause of the accident
C) Whether the policyholder has a valid insurance policy
D) All of the above

Answer: D) All of the above


4. In motor insurance, what is an "insured declared value" (IDV)?

A) The maximum amount payable under a policy
B) The total sum insured for repairs
C) The market value of the vehicle at the time of policy issuance
D) The cost of a new replacement vehicle

Answer: C) The market value of the vehicle at the time of policy issuance


5. If a vehicle is involved in an accident and sustains damage, which type of inspection is required for the claim process?

A) Police inspection
B) Physical damage assessment by the insurer
C) Legal review of the accident
D) Vehicle owner's self-inspection

Answer: B) Physical damage assessment by the insurer


6. What is a "claim settlement" in the context of motor insurance?

A) The process of reviewing and approving the claim
B) The final payout made by the insurance company to the policyholder
C) The total repair costs covered by the insurer
D) The premium amount paid by the policyholder

Answer: B) The final payout made by the insurance company to the policyholder


7. What is "depreciation" in the context of a motor insurance claim?

A) The reduction in the vehicle's value over time
B) The additional cost of repair due to delays
C) The penalty for fraudulent claims
D) The cost of labor during repair

Answer: A) The reduction in the vehicle's value over time


8. In motor insurance, which of the following is typically covered under "comprehensive insurance"?

A) Damage to the insured vehicle
B) Damage caused to third-party property or injury
C) Damage caused due to natural calamities
D) All of the above

Answer: D) All of the above


9. What role does the "third-party insurer" play in motor insurance claims?

A) Settles the claims for damages caused by third-party accidents
B) Assesses the repair costs for the insured vehicle
C) Provides emergency services after an accident
D) None of the above

Answer: A) Settles the claims for damages caused by third-party accidents


10. What does "third-party liability" in motor insurance cover?

A) Only damages to the insured vehicle
B) Only damages to third-party property or people
C) The insured vehicle and driver’s medical expenses
D) None of the above

Answer: B) Only damages to third-party property or people


11. When is a motor insurance claim considered "settled" by the insurer?

A) When the policyholder pays the premium
B) When the vehicle is repaired
C) When the insurance company compensates the policyholder for damages
D) When the policyholder submits the necessary documents

Answer: C) When the insurance company compensates the policyholder for damages


12. What is the usual timeline for settling a motor insurance claim in India?

A) Within 24 hours
B) Within 7 days
C) Within 15 days
D) Within 30 days

Answer: C) Within 15 days


13. What is "excess" or "deductible" in motor insurance?

A) A refund the insurer gives to the policyholder
B) A portion of the claim amount that the policyholder must pay before the insurer covers the remaining cost
C) The total sum insured for the vehicle
D) A penalty for late payment of premiums

Answer: B) A portion of the claim amount that the policyholder must pay before the insurer covers the remaining cost


14. If the insurer determines that the claim amount is less than the actual damage, what action can the policyholder take?

A) Reject the claim and file a lawsuit
B) Accept the reduced amount and repair the vehicle
C) Appeal the decision and provide additional evidence
D) Wait for the insurer to increase the payout

Answer: C) Appeal the decision and provide additional evidence


15. Which of the following can delay the motor insurance claim process?

A) Providing incomplete or inaccurate documentation
B) Delays in accident reporting
C) Failure to cooperate with the insurer’s investigation
D) All of the above

Answer: D) All of the above

1. Which organization regulates the motor insurance sector in India?

A) Reserve Bank of India (RBI)
B) Securities and Exchange Board of India (SEBI)
C) Insurance Regulatory and Development Authority of India (IRDAI)
D) National Insurance Corporation of India (NIC)

Answer: C) Insurance Regulatory and Development Authority of India (IRDAI)


2. According to the Motor Vehicles Act, 1988, which type of motor vehicle insurance is mandatory for all vehicles?

A) Comprehensive insurance
B) Third-party liability insurance
C) Own damage insurance
D) Personal accident cover

Answer: B) Third-party liability insurance


3. The Insurance Regulatory and Development Authority of India (IRDAI) came into existence in which year?

A) 1992
B) 2000
C) 1999
D) 1985

Answer: A) 1992


4. As per the IRDAI guidelines, how long is the "free-look" period for a motor insurance policy after purchase?

A) 7 days
B) 14 days
C) 21 days
D) 30 days

Answer: B) 14 days


5. The "Insured Declared Value" (IDV) of a vehicle is determined based on:

A) The current market value of the vehicle
B) The cost of replacing the vehicle with a new one
C) The policyholder’s declared value
D) The sum insured by the insurer

Answer: A) The current market value of the vehicle


6. What does the "IRDAI (Motor Insurance) Regulations" primarily cover?

A) Premium calculation methods
B) Coverage for vehicles involved in accidents
C) Rules for setting up insurance agencies
D) Guidelines for settling insurance claims

Answer: D) Guidelines for settling insurance claims


7. What is the maximum penalty for driving a vehicle without valid insurance under the Motor Vehicles Act, 1988?

A) ₹500
B) ₹1,000
C) ₹2,000
D) ₹5,000

Answer: C) ₹2,000


8. According to IRDAI regulations, how much time does an insurance company have to settle a motor insurance claim after all required documents are submitted?

A) 7 days
B) 15 days
C) 30 days
D) 60 days

Answer: C) 30 days


9. Under the IRDAI regulations, which of the following documents is required to file a motor insurance claim?

A) Police FIR (First Information Report)
B) Repair bills from an authorized workshop
C) Driving License
D) All of the above

Answer: D) All of the above


10. As per the IRDAI guidelines, when can an insurance company refuse to renew a motor insurance policy?

A) When the vehicle has been involved in multiple accidents
B) When the policyholder has a history of late premium payments
C) If the vehicle does not comply with the legal requirements for insurance
D) None of the above

Answer: C) If the vehicle does not comply with the legal requirements for insurance


11. Which of the following is true regarding the "No Claim Bonus" (NCB) in motor insurance regulations?

A) NCB is awarded for every claim made
B) NCB is applicable only on the third-party insurance policy
C) NCB is offered for claim-free years, reducing the renewal premium
D) NCB is mandatory for all policyholders

Answer: C) NCB is offered for claim-free years, reducing the renewal premium


12. In case of a third-party liability insurance claim, the maximum liability amount payable by the insurer is determined by:

A) The policyholder's choice
B) The type of vehicle involved in the accident
C) The court's judgment
D) The IRDAI guidelines

Answer: C) The court's judgment


13. In India, what is the maximum period for which motor insurance companies can provide long-term third-party insurance for new cars under the IRDAI guidelines?

A) 1 year
B) 2 years
C) 3 years
D) 5 years

Answer: C) 3 years


14. Which of the following is an important regulation under the IRDAI for motor insurance companies regarding claim settlements?

A) Claims must be settled without discrimination based on the vehicle’s age
B) Claims must be settled within 60 days of submission
C) Insurers must settle claims on the basis of market value, excluding depreciation
D) Both B and C

Answer: D) Both B and C


15. Under IRDAI guidelines, what should an insurer do if it rejects a claim?

A) Notify the policyholder within 30 days of receiving the claim
B) Provide the policyholder with a detailed written explanation for rejection
C) Refund the premium amount to the policyholder
D) All of the above

Answer: B) Provide the policyholder with a detailed written explanation for rejection

 

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