Casualty Policy Provisions/Policy Provisions and Contract Law

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Conditions

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Which of the following is a mandatory part of an insurance policy the varies with each individual policy?

Declarations

The part of a policy that clarifies terms in the policy is the

Definitions

Which of the following provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time?

Duties after loss

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions

All of the following are found in the declarations section of a policy EXCEPT the

Exclusions (Declarations state who is insured, what is insured, where the property is located, when the policy begins and ends, how much insurance and how much premium. the exclusions tell what is not covered.)

The declarations page of the homeowners policy provides all of the following information EXCEPT

A statement that earthquake damage is not covered.

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional coverage

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the

Additional insured

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's consent.

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation.

The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?

Company A will pay $16,000; Company B will pay $8,000.

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

Which of the following would be named on the declarations page of a property or liability policy?

First named insured

Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim?

Get the insured's consent

The policy conditions define

How parties to the contract must act following a loss.

When would a misrepresentation on an insurance application be considered fraud?

If it is intentional and material

The pro rata liability clause is designed to protect the principle of

Indemnity.

Who is responsible for filling out a notice of claim form?

Insured

Persons covered under an insurance policy, whether named or not, are known as the

Insureds

All of the following are conditions commonly found in the insurance policy except

Insuring agreement

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the...

Insuring agreement

For a contract to be enforceable by law, the purpose of the contract must be

Legal and not against public policy.

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal.

Duties of the insurer found in property policy conditions include all of the following except

Notify the insured in the event of financial difficulty.

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called

Pro rata liability

A sworn written statement that must be funish by the insured to the insurer before any loss under a policy can be paid is called

Proof of loss

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of loss

All of the following are considered parts of the policy structure EXCEPT

Provisions.

What type of information would be found in a policy's insuring agreement?

Renewal dates (location of premises, policy limits, insurer's address)

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction.

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy

The loss reimbursement will be paid to the mortgagee as their interest may appear, the mortgagee may bring a suit in their own name to recover damages to covered property, the mortgagee rights of recovery will not be defeated by any act or neglect of the insured. (all of the above are true.)

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

The part of a property policy that shows the amount of insurance, premium, and policy term is the

declarations

The proof of loss statement must be

in writing.

The Federal Fair Credit Reporting Act

Regulates consumer reports.

What insurance policy provision defines how the policy will respond if there is more than on insurance policy written on the same risk?

Other insurance

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss?

Appraisal clause

In insurance, an offer is usually made when an

An applicant submits an application to the insurer.

Bob insists that the insurer owes him $10,000 for liability damages, while his insurer asserts that they owe him no more than $7,000. Which of the following would most likely describe the type of claim settlement that they might pursue?

Arbitration

Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim?

Arbitration

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsements