Other Than Life (OTL) Practice Exam

In insurance terms, which denotes an event that triggers coverage?

1. Claim

2. Risk

3. Policy

4. Underwriting

The correct answer is: Claim

In insurance terminology, a claim is the correct answer because it represents a formal request made by the policyholder to the insurer for payment or compensation for a loss covered under the terms of the insurance policy. When an event occurs that results in a loss, such as an accident, theft, or damage to property, the policyholder submits a claim to inform the insurance company about the incident and to seek coverage for the incurred expenses as outlined in the policy. The other options, while related to insurance concepts, do not specifically denote an event that triggers coverage. Risk refers to the possibility of a loss occurring and is a fundamental concept in insurance that helps insurers determine premiums and coverage options. A policy is a contract between the insurer and the insured that outlines the terms, conditions, and coverage limits, but it does not itself trigger coverage. Underwriting is the process by which insurers evaluate the risk of insuring a particular individual or entity and determine the terms of coverage, but it is not an event that leads to a claim for payment.