Unit 2 Practice Questions
which of the following individuals would be considered a competent party in an insurance contract a. Curt, who turns 12 at the end of year b. Stephen, who is 21, does not have a job, and lives at home with his parents c. Maria, who has been drinking heavily at a bar prior to meeting with her insurance agent d. Alexis, who recently was diagnosed as mentally insane
Stephen, who is 21, does not have a job, and lives at home with his parents
which of the following term describes a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration a. an offer b. an acceptance c. a contract d. a consideration
a contract
Jill is filling out an insurance application with information that she believes to be true. the information that she is providing is considered a. a representation b. a misrepresentation c. a material misrepresentation d. a warranty
a representation
a guarantee that something is true is a. a representation b. a misrepresentation c. a material misrepresentation d. a warranty
a warranty
a statement that is guaranteed to be true is a. a warranty b. a representation c. an impersonation d. a misrepresentation
a warranty
in insurance contract is prepared by one party (the insurance company) with little or no opportunity for the other party (the insured) to bargain. This characteristic is called a. conditional b. unilateral c. aleatory d. adhesion
adhesion
The failure to disclose known facts is a. material misrepresentation b. concealment c. waiver d. fraud
concealment
Allison's auto insurance policy is due on the 10th of each month. Ever since she has had the policy, she has sen the premium in on the 16th of the month. The insurer has been accepting the premium this way for the past 5 years. A new CEO takes over and decides to cancel Allison's policy for a nonpayment of premium. Allison contests this decision and legally gets the policy reinstated. The decision to reinstate the policy is an example of a. waiver b. adhesion c. aleatory d. estoppel
estoppel
Anthony intentionally lied on his insurance application to obtain coverage. This is an example of a. concealment b. fraud c. estoppel d. adhesion
fraud
misrepresentations do not necessarily void insurance contracts. To do so, they must be a. material b. unilateral c. personal d. warranties
material
an agreement between two parties is also called a. adhesion b. aleatory c. offer and acceptance d. unilateral
offer and acceptance
in an insurance contract, the consideration that the insured gives is called a. the premium payment b. the offer c. the acceptance d. the agreement
the premium payment
which of the following is not an element of a legal contract a. offer b. acceptance c. legal purpose d. unilateral
unilateral