[Dec-2025] M05 Dumps PDF - M05 Real Exam Questions Answers
M05 Dumps 100% Pass Guarantee With Latest Demo
NEW QUESTION # 49
What is the effect of a waiver on an insurance contract?
- A. It allows one party to ignore certain policy terms
- B. It terminates the policy
- C. It reduces the policyholder's obligation to make full disclosure
- D. It allows the insurer to increase the premium
Answer: A
Explanation:
A waiver in insurance law refers to the voluntary relinquishment of a known right, such as forgiving a breach of a condition in the policy. It doesn't cancel the contract but may alter certain terms.
NEW QUESTION # 50
Which of the following terms in an insurance policy is typically enforceable in a court of law?
- A. Exclusions
- B. Conditions precedent
- C. Representations
- D. Warranties
Answer: D
Explanation:
Warrantiesare conditions in the insurance contract that are considered to be fundamental and must be strictly adhered to. A breach of warranty can result in the insurer being able to avoid liability. Representations are made by the insured but are not legally binding in the same way.
NEW QUESTION # 51
In the context of an insurance claim, what does the principle of subrogation refer to?
- A. The insured's obligation to provide all relevant documents to the insurer
- B. The insured's right to receive compensation up to the value of their loss
- C. The insurer's right to reduce the claim payout
- D. The insurer's right to pursue a third party responsible for the loss
Answer: D
Explanation:
Subrogationis the principle that allows the insurer to step into the shoes of the insured and pursue any third party responsible for causing the loss. This helps the insurer recover the claim amount paid out to the insured.
NEW QUESTION # 52
In a chain of events, the proximate cause of a loss is always the
- A. dominant event leading to the loss.
- B. only event contributing towards the loss.
- C. only event which is not excluded by the terms of the policy.
- D. last event before the loss occurs.
Answer: A
NEW QUESTION # 53
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It helps consumers resolve complaints with their insurers
- B. It regulates the pricing of insurance products
- C. It issues licenses to insurance companies
- D. It provides legal advice to insurers
Answer: A
Explanation:
The Financial Ombudsman Service (FOS) is an independent body that helps consumers resolve disputes with financial services, including insurance companies. It provides a neutral mechanism for dispute resolution.
NEW QUESTION # 54
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?
- A. Avoid the contract, refuse all claims and keep the premium.
- B. Reject the claim, but maintain the policy.
- C. Reduce the claim amount in proportion to the premium it would have charged.
- D. Apply any terms it would have applied if the misrepresentation had not taken place.
Answer: C,D
NEW QUESTION # 55
What is the primary purpose of the Duty of Disclosure in an insurance contract?
- A. To protect the insurer from financial instability
- B. To allow the policyholder to choose the terms of coverage
- C. To ensure the insurer is able to assess the risk involved in underwriting the policy
- D. To ensure that both parties understand the terms of the contract
Answer: C
Explanation:
The Duty of Disclosure ensures that the insured provides all relevant information about the risk they are insuring. This allows the insurer to assess the risk accurately and set appropriate premiums.
NEW QUESTION # 56
When the rule in Rylands v Fletcher operates, liability arises from the:
- A. defendant's trespass to land
- B. vicarious liability of the defendant
- C. defendant's negligence.
- D. strict liability of the defendant
Answer: D
Explanation:
The rule inRylands v Fletcherestablishesstrict liability, meaning the defendant can be held liable for certain kinds of damage even if they were not negligent or at fault. This applies in situations where a person brings something onto their land (like water or chemicals) that has the potential to escape and cause damage. If it does escape, the defendant is typically held strictly liable for any resulting harm, regardless of whether they were negligent or not.
NEW QUESTION # 57
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
Which special defences are available to the fort of libel?
- A. Prescription.
- B. Honest opinion.
- C. Privilege.
- D. Statutory authority.
- E. Necessity.
Answer: B,C
NEW QUESTION # 58
Which of the following is an example of a condition precedent in an insurance contract?
- A. The insurer is required to pay claims for theft
- B. The insured must maintain the insured item in good condition
- C. The insured must pay the premium
- D. The insurer must provide coverage for accidental damage
Answer: B
Explanation:
A condition precedent is an obligation that must be met before the insurer becomes liable for a claim. For example, the insured might need to maintain property in good condition or comply with safety measures before coverage applies.
NEW QUESTION # 59
For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as
- A. an exception clause.
- B. a continuing warranty.
- C. an express term.
- D. a basis of the contract clause.
Answer: C,D
NEW QUESTION # 60
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It helps consumers resolve complaints with their insurers
- B. It regulates the pricing of insurance products
- C. It issues licenses to insurance companies
- D. It provides legal advice to insurers
Answer: A
Explanation:
The Financial Ombudsman Service (FOS) is an independent body that helps consumers resolve disputes with financial services, including insurance companies. It provides a neutral mechanism for dispute resolution.
NEW QUESTION # 61
Fran is self-employed and works from home. She uses her spare bedroom as an office and separately insures her computer, photocopier and other items of office equipment. She occasionally uses the equipment for personal use. Under the Consumer Insurance (Disclosure and Representations) Act 2012. in relation to insuring this equipment, she would be defined as a
- A. non-consumer because the items covered are not household items.
- B. consumer because she is working from home rather than on business premises.
- C. non-consumer because her insurance cover is mainly for business use.
- D. consumer because she is an individual.
Answer: D
NEW QUESTION # 62
Under the provisions of the Contracts (Rights of Third Parties) Act 1999, the right to enforce a contractual term arises if a third party.
- A. proves that the parties to the contract intended to limit his rights.
- B. appoints an agent to carry out the contract provisions.
- C. is one of a general class of persons identified in the contract as benefitting from the contract.
- D. is the agent who arranged the contract.
Answer: C
NEW QUESTION # 63
A survey of a car repairers reveals a spray booth exists by an unguarded paraffin space beater. Also, a day's supply of paint is kept within the building and waste is removed daily from a metal bin. What will the underwriter perceive as the main physical hazard?
- A. The unguarded paraffin space heater.
- B. The spray booth.
- C. The waste bin.
- D. The paint.
Answer: A
NEW QUESTION # 64
Under insurance law, what is the effect of a fraudulent claim on an insurance policy?
- A. The policyholder may still receive a partial payout
- B. The policyholder must repay any claim payments made previously
- C. The insurer is required to pay the claim regardless of the fraud
- D. The insurer may cancel the policy and deny the claim
Answer: D
NEW QUESTION # 65
A claimant may possibly recover money transferred under an illegal contract when
- A. the contract is against public policy but not substantive law.
- B. the legal portion of the contract can be severed from the illega portion.
- C. the illegality makes the contract voidable rather than void.
- D. both parties to the contract are equal in wrongdoing.
Answer: D
NEW QUESTION # 66
When, if at all, does the duty of fair presentation of a risk apply after a non-consumer insurance contract has been formed?
- A. From the date of a breach of warranty.
- B. On submission of a claim.
- C. Where there is a variation in the insured risk.
- D. It does not apply as the duty is to take reasonable care not to make a misrepresentation.
Answer: C
NEW QUESTION # 67
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?
- A. Where the building was destroyed by an explosion.
- B. Where there is underinsurance.
- C. Upon the request of any person(s) interested in the buildings.
- D. When fraud or arson by the insured is suspected.
Answer: C,D
NEW QUESTION # 68
Which of the following is considered an exclusion in a standard property insurance policy?
- A. Theft by a third party
- B. Loss due to war or civil unrest
- C. Loss caused by a fire
- D. Damage caused by accidental breakage
Answer: B
Explanation:
Many property insurance policies exclude certain high-risk events such as war, civil unrest, and terrorism.
These exclusions limit the insurer's exposure to catastrophic losses.
NEW QUESTION # 69
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?
- A. A deliberate attempt to obtain the proceeds of two policies.
- B. An overlap in cover between two different types of insurance policy.
- C. A merger between two major insurance companies.
- D. The inadvertent non-cancellation of a policy when a new policy is taken out.
Answer: A,B
NEW QUESTION # 70
In which of the following cases can the insurer void an insurance contract?
- A. If the insurer fails to provide a certificate of insurance
- B. If the insurer cannot locate the policyholder
- C. If the policyholder has misrepresented a material fact at the time of underwriting
- D. If the policyholder does not pay the premium
Answer: C
Explanation:
If the policyholder makes a material misrepresentation during the underwriting process, the insurer may void the contract. This is a violation of the principle of utmost good faith.
NEW QUESTION # 71
The Chancery Division is a division of the:
- A. County Court.
- B. Crown Court.
- C. High Court.
- D. Magistrates Court.
Answer: C
Explanation:
The Chancery Division is one of the three divisions of the High Court in the United Kingdom, dealing with matters such as business law, trusts, and intellectual property.
NEW QUESTION # 72
How do an insurer's subrogation rights differ, if at all, between a theft policy and a personal accident policy?
- A. Subrogation rights apply under both policies.
- B. Subrogation rights only apply under a theft policy.
- C. Subrogation rights only apply under a personal accident policy.
- D. Subrogation rights do not apply under either policy.
Answer: B
NEW QUESTION # 73
Which divisional court of the High Court includes a Commercial Court?
- A. Queen's Bench Division.
- B. Family Division.
- C. Partnership Division.
- D. Chancery Division.
Answer: D
NEW QUESTION # 74
......
Dumps Real CII M05 Exam Questions [Updated 2025]: https://testinsides.vcedumps.com/M05-examcollection.html
