Insurance Broker Certification Practice Exam

Which of the following is considered the basis for a claim against an insurance policy?

1. An accident

2. A loss

3. A peril

4. A premium payment

The correct answer is: A loss

A claim against an insurance policy arises from a loss that the insured has sustained and is seeking compensation for under the terms of their policy. The loss must be covered by the insurance policy, meaning it typically results from an event that falls within the definition of coverage outlined in the policy. When an individual experiences a loss, such as damage to property or an injury, they can file a claim with their insurance company to seek reimbursement or payment for that loss. This is why "a loss" is considered the basis for a claim. It signifies that there was a negative event affecting the insured's financial situation or property. In contrast, while an accident could indeed lead to a loss, it does not directly encapsulate the claim itself, as not all accidents lead to financial loss that is covered by insurance. Similarly, a peril refers to a specific risk or cause of loss, such as fire or theft, but is more about the nature of the risk rather than the claim itself. Lastly, premium payments are what the insured pays to maintain their insurance coverage; they are not the basis for a claim but rather a part of the ongoing relationship between the insurer and the insured.