[Oct 14, 2025] Get New M05 Practice Test Questions Answers
M05 Dumps and Exam Test Engine
NEW QUESTION # 35
John has a whole of life policy and has recently been diagnosed with cancer. When, if at all. must he disclose this to his insurer?
- A. At the date of the next premium payment.
- B. Immediately, irrespective of prognosis.
- C. Immediately, but only if the diagnosis is terminal.
- D. He does not need to disclose this.
Answer: D
NEW QUESTION # 36
Which of the following terms in an insurance policy is typically enforceable in a court of law?
- A. Representations
- B. Warranties
- C. Conditions precedent
- D. Exclusions
Answer: B
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 # 37
A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?
- A. Pay the claim in full.
- B. Make an ex-gratia payment.
- C. Avoid the policy ab initio.
- D. Reject the claim for breach of warranty.
Answer: A
NEW QUESTION # 38
Dan made a financial arrangement on behalf of Liz. However, Liz had the arrangement set aside by the court on the basis that she had been unduly influenced by Dan. To establish undue influence, the court must have specifically identified Dan as
- A. a person holding a senior position at Liz's bank.
- B. a person holding a dominant position over Liz.
- C. Liz's independent financial adviser.
- D. Liz's husband.
Answer: B
NEW QUESTION # 39
What is the effect of a waiver on an insurance contract?
- A. It allows one party to ignore certain policy terms
- B. It reduces the policyholder's obligation to make full disclosure
- C. It terminates the policy
- 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 # 40
A professional indemnity policy includes a condition requiring that the insured must give prompt notice of any circumstance that could give rise to a claim. What type of condition is this?
- A. A condition precedent to liability.
- B. A collateral condition.
- C. A condition precedent to the contract.
- D. A suspensive condition.
Answer: A
NEW QUESTION # 41
What principle requires that both the insurer and insured disclose all material facts to each other before and during the contract?
- A. The principle ofutmost good faith (uberrimae fidei)
- B. The principle ofcontribution
- C. The principle ofsubrogation
- D. The principle ofindemnity
Answer: A
Explanation:
Explanation: Under the principle ofutmost good faith, both parties in an insurance contract are required to disclose all material facts that may influence the other party's decision to accept or reject the policy or determine the premium. This obligation exists both before and during the contract.
NEW QUESTION # 42
The test of the materiality of facts in an insurance contract is defined according to the opinion of a
- A. reasonable person.
- B. prudent underwriter.
- C. diligent broker.
- D. honest proposer.
Answer: B
NEW QUESTION # 43
Which of the following is a feature of an insurance contract under the principle of "utmost good faith"?
- A. Both parties must agree on the premium amount in advance.
- B. The insurer must pay all claims, regardless of the terms of the policy.
- C. The insured must disclose all material facts relevant to the risk.
- D. The insurer must be transparent about the terms of the policy.
Answer: C
Explanation:
Under the principle of utmost good faith (also known as "uberrimae fidei"), the insured must disclose all material facts to the insurer that could affect the insurer's decision to provide coverage or the terms of the policy.
NEW QUESTION # 44
In the context of an insurance claim, what does the principle of subrogation refer to?
- A. The insurer's right to reduce the claim payout
- B. The insured's obligation to provide all relevant documents to the insurer
- C. The insurer's right to pursue a third party responsible for the loss
- D. The insured's right to receive compensation up to the value of their loss
Answer: C
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 # 45
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It provides legal advice to insurers
- B. It regulates the pricing of insurance products
- C. It helps consumers resolve complaints with their insurers
- D. It issues licenses to insurance companies
Answer: C
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 # 46
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was innocent.
- B. no claim had been submitted or paid.
- C. the premium was paid by monthly installments.
- D. the misrepresentation was fraudulent.
Answer: A
NEW QUESTION # 47
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 her insurance cover is mainly for business use.
- B. non-consumer because the items covered are not household items.
- C. consumer because she is working from home rather than on business premises.
- D. consumer because she is an individual.
Answer: D
NEW QUESTION # 48
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of an express term in reaching or recording an agreement?
- A. It may be oral or in writing.
- B. It may be implied by conduct.
- C. It will usually override any implied term which conflicts with it.
- D. It must be evidenced in documentary form.
Answer: A,C
NEW QUESTION # 49
What type of reduction is sometimes applied to the replacement cost of an item under an insurance policy claim in order to reflect the application of indemnity?
- A. Wear and tear.
- B. Loss of interest.
- C. Brokerage.
- D. An excess.
Answer: A
NEW QUESTION # 50
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. a continuing warranty.
- B. a basis of the contract clause.
- C. an express term.
- D. an exception clause.
Answer: B,C
NEW QUESTION # 51
When the rule in Rylands v Fletcher operates, liability arises from the:
- A. vicarious liability of the defendant
- B. strict liability of the defendant
- C. defendant's negligence.
- D. defendant's trespass to land
Answer: B
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 # 52
......
2025 New ExamTorrent M05 PDF Recently Updated Questions: https://passleader.examtorrent.com/M05-prep4sure-dumps.html
