P&c policy provisions and contract law

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In insurance, an offer is usually made when

An applicant submits an aplication to the insurer

In the event of a loss covered by the policy , if the insurer requests a signed sworn proof of loss, the named insured is required to submit within

A specified time

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree on the value of a property loss is known as

Appraisal

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 comany A, and 50,000 of identical coverage on the same building through insurance company B. Assuming coinsurance is not an issue, when a 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

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

Concealment

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements except

Conditions

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following

Consideration

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

Declarations

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

Get the insured's consent

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

Notify the insured in the event of financial difficulty

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

Proof of Loss

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

Proof of loss

The gramm-leach-billey act was passed to

Protect private customer information filed with a financial institution

Federal Fair Credit Reporting Act

Regulates consumer reports

Which of the following is not the consideration in a policy

The application given to a prospective insured

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.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breech an insurance contract

Warranty

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

When an insurers underwriter aproves coverage

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

concealment

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

When a disagreement occurs as to how to settle a loss in a "fender bender" between two cars, what procedure is followed?

Arbrivation through the court

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree in the value of a property loss is known as

appraisal

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

provisions

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

All of the above

Which of the following describes the transfer of a legal right or interest in an insurance company?

Assignment

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

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

First name insureds

The policy conditions define

How parties to the contract must act following a loss.

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

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

Endorsements

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

Legal and not against public policy

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information

The fair credit reporting act


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