General Insurance
Which of the following characteristics of a contract means that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
aleatory
An agent's actions show what kind of authority
apparent
Mutual companies are owned by
policyowners
Risk in insurance terminology refers to
the uncertainty of financial loss
Which method of dealing with risk is applied when a person purchases insurance?
transfer
An insurance contract must contain all of the following elements to be considered legally binding EXCEPT
beneficiary's consent
In an insurance contract, consideration refers to
exchange of something of value by both parties
In insurance contracts, a warranty is a
statement that must be true
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
utmost good faith
Who acts on behalf of the principal?
agent
Conditions that increase the chances of an insured loss occurring are referred to as
hazards
When would a misrepresentation on the insurance application be considered fraud?
if it is intentional and material
Which provision states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
indemnity
All of the following are examples of risk retention EXCEPT
premiums
Which of the following is an example of agent's fiduciary responsibilities?
promptly forwarding premiums to the insurer