Certified Financial Consultant (CFC) Practice Exam

Which is a basis for a claim against an insurance policy?

1. Accident

2. Loss

3. Theft

4. Damage

The correct answer is: Loss

A basis for a claim against an insurance policy fundamentally relates to the occurrence of a loss that is covered under the terms of the policy. In the context of insurance, "loss" refers to a financial setback resulting from events such as accidents, theft, or damage to property. When a policyholder experiences a situation leading to a loss, they have the right to file a claim to seek financial reimbursement or coverage for that loss, provided it falls within the scope of their policy. The specific circumstances (like accidents, theft, or damage) are manifestations of types of losses, but the core concept that triggers the claim process is the actual loss itself. By understanding that loss is the central element that prompts a claim, it becomes clear why this option represents the underlying basis for claims against an insurance policy. The other options refer to specific events or circumstances that may lead to a loss but do not capture the essential nature of the claims process itself.