WAEC 2023 Insurance Essays And Objective Questions & Answers

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The proximate cause of the accident was the presence of the heap of sand on the road, which led to the driver swerving and colliding with the road divider and Mr. Okuku.

The driver, Mr. Olu, was at fault.

Mr. Olu was at fault because he failed to exercise due care and attention while driving.

Comprehensive Motor Insurance policy

Workmen’s Compensation Insurance policy

Sick Leave Benefit

(1dii) Permanent Disability Benefit

Contractor’s All Risk (CAR) Insurance policyoss.

Insurable interest refers to an individual or entity having a financial stake or relationship to an insured item or person. It is the basis on which insurance contracts are designed and insured parties are identified as being eligible for coverage.

(i) Legitimate interest: The interest must not be frivolous or fictional, it must be a true relationship that has some degree of financial value.
(ii) Legal and valid: The interest must be legal and valid and the insurer must be able to demonstrate tangible evidence of such an interest.
(iii) Relevant and measurable: The interest must be measurable and relevant, it should not be speculative or vague.
(iv) Continuous: The interest must exist continuously throughout the duration of the policy period.
(v) At the time of loss: The interest must exist at the time of the loss or damage.
(vi) Direct or indirect interest: The interest can be direct or indirect; it can be related to either property or person.
(vii) Financial protection: The interest should provide financial protection against a potential loss or damage.

(i) Fortuitous: The risk must be accidental or unintended. It should not be a predictable event.
(ii) Definite and determinable: The risk should be definite and determinable in terms of time place and extent of the loss or damage.
(iii) Large number of homogeneous risks: The risk should involve a large number of people exposed to the same risk.
(iv) Calculable probability: The probability of the risk occurring and the cost of loss or damage should be calculable and based on statistical data.
(v) Not catastrophic: The risk should not be catastrophic or result in a massive loss that would threaten the stability of the insurance company.
(vi) Adverse selection: The risk should be such that the insured party is not prone to engage in adverse selection i.e choosing to purchase insurance only when they anticipate a loss.
(vii) Affordable premiums: The premiums should be affordable and reasonable for the insured party.

(i) Sum Insured: The initial sum insured, which was N 80,000,000, serves as a reference point. The insurer will consider this value as the maximum amount payable under the policy.

(ii) Policy Coverage: The terms and conditions of the insurance policy will outline the specific coverage provided. The insurer will review the policy to ensure that fire damage is covered and falls within the scope of the policy.

(iii) Extent of Damage: The insurer will assess the extent of the fire damage to the shopping plaza. This evaluation includes the structural damage, loss of contents, and any other relevant factors that indicate the severity of the fire.

(iv) Market Value: The insurer may consider the current market value of the shopping plaza. This assessment takes into account factors such as property location, size, condition, and other market influences that could affect the value of the property.

(v) Depreciation: Depending on the terms of the policy, the insurer may apply depreciation to certain elements of the claim. Depreciation factors in the age and condition of the building and its contents, and it reduces the claim payout accordingly.

(vi) Salvage Value: If any salvageable items or parts of the shopping plaza remained after the fire, the insurer may deduct the estimated value of those salvageable assets from the claim payout. This helps offset the costs incurred by the insurer.

(vii) Deductibles and Excess: The insurance policy may have deductibles or excess clauses, which require the insured to contribute a certain amount towards the claim. The insurer will deduct the applicable deductible or excess from the final payout.

(viii) Adjusters’ Report: The insurer’s loss adjusters assess the claim and provide a report with their findings. The adjusters investigate the incident, evaluate the damage, and recommend an appropriate payout based on their professional judgment and the policy provisions.

Endorsements: This refers to amendments or modifications that are made in the terms and conditions of an existing insurance policy. An endorsement can be used to add or remove coverage change the policyholder’s name or address modify the sum insured or make any other changes that reflect the changing needs of the policyholder.

Ex-gratia payment: An ex-gratia payment is a voluntary payment made by an insurer to a policyholder or a beneficiary even when there is no legal obligation to do so.

Subject matter of insurance: The subject matter of insurance is the object or thing being insured. It refers to the specific property or interest being covered by the insurance policy. For example in car insurance the subject matter of insurance is the car being insured.

Hazard: Hazard refers to a condition or situation that increases the probability of loss or damage to the subject matter being insured. Hazards can make the subject matter of insurance riskier and more likely to suffer damage or loss.

Days of grace: Days of grace refer to a specified period of time granted by an insurance company to the policyholder beyond the due date for premium payment.


Reinsurance is a process in which insurance companies transfer a portion of their risk to other insurance companies, known as reinsurers.

(i) Insurance allows individuals to transfer the financial risk of potential losses to an insurance company.
(ii) Insurance provides financial security to individuals by compensating them for covered losses.
(iii) Having insurance coverage gives individuals peace of mind, knowing that they are protected against potential losses.
(iv) Health insurance is a type of insurance that provides coverage for medical expenses.
(v) Some types of insurance, such as life insurance and annuities, offer individuals long term savings and investments.

(i) Insurance offers financial protection to individuals and businesses against unexpected events.
(ii) Insurance plays a vital role in managing risks in society.
(iii) Insurance encourages investment and economic growth.
(iv) Insurance enhances peace of mind in the society.
(v) Insurance plays a crucial role in ensuring social welfare and stability.

A paid-up policy refers to a type of life insurance policy where the policyholder has completed the required premium payments and has opted to stop making further premium payments.

(i) Insurance Companies: Insurance companies are the primary operators in the insurance market. They provide insurance coverage to individuals, businesses, and organizations.

(ii) Insurance Agents and Brokers: Insurance agents and brokers act as intermediaries between insurance companies and policyholders. They assist individuals or businesses in finding suitable insurance policies.

(iii) Reinsurance Companies: Reinsurance companies specialize in assuming some of the risks undertaken by primary insurance companies.

(iv) Insurance Regulators: Insurance regulators are government entities responsible for overseeing the insurance market and ensuring compliance with regulations and laws.

(v) Insurance Underwriters: Insurance underwriters assess risks associated with insurance applications.

(vi) Loss Adjusters: Loss adjusters, also known as claims adjusters, work for insurance companies to investigate and assess claims made by policyholders.

Insurance Aggregators: Insurance aggregators are online platforms or intermediaries that provide comparisons of insurance products from multiple insurers.


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