P & C chapter 2 quiz

Any ambiguities in a P&C policy will be resolved in favor of the policyowner because the policy is a: a. contract of adhesion b. conditional contract c. unilateral contract d. aleatory contract

a. contract of adhesion

A binder can expire on all of the following EXCEPT: a. date of application b. day coverage goes into effect c. day the binder expires d. day following notification that the binder has been cancelled

a. date of application

A binder is a(n): a. interim insuring agreement b. application c. counteroffer d. endorsement

a. interim insuring agreement

With regard to insurance, the term consideration means: a. the premium and the statements on the application b. the insurer's method of evaluating the applicant for coverage c. the screening process all agents undergo prior to licensing d. the side-by-side policy comparison by the applicant

a. the premium and the statements on the application

Which of the following terms indicates that an insurance contract contains the legally enforceable promises of only one party? a. adhesion b. unilateral c. conditional d. aleatory

b. unilateral

Which of the following principles states that in forming an insurance contract, both parties have a responsibility to the other? a. Doctrine of Warranties b. Doctrine of Representations c. Doctrine of Utmost Good Faith c. Doctrine of Reasonable Expectations

c. Doctrine of Utmost Good Faith

In purchasing an insurance contract, the applicant must accept the contract as written. This type of contract is referred to as a(n): a. settled contract b. aleatory contract c. contract of adhesion d. personal contract

c. contract of adhesion

An incorrect statement made intentionally on an Auto insurance application is: a. fraud b. warranty c. misrepresentation d. concealment

c. misrepresentation

A person who has a responsibility for the financial well-being of another is a(n): a. account b. attorney-in-fact c. broker d. fiduciary

d. fiduciary

Which of the following is NOT true regarding consideration in a P&C policy? a. part of the insured's consideration is the premium b. part of the insured's consideration are the statements on the application c. part of the company's consideration are the promises in the policy d. part of the company's consideration is the payment of a claim

d. part of the company's consideration is the payment of a claim