Insurance Pre-licensing : Chapter 1 quiz
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
The authority granted to an agent through the agent's contract is referred to as
express authority
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a...
Lloyd's association
Which of the following would qualify as a competent party in an insurance contract?
The applicant has a prior felony conviction
What documentation grants express authority to an agent?
Agent's contract with the principal
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
Apparent
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment
Which of the following is NOT an essential element of an insurance contract?
Counteroffer
Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called..
Material misrepresentations
Insurance is the transfer of...
Risk
Which of the following types of insurers is owned by stockholders?
Stock
The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called...
avoidance
An insurance contract must contain all of the following to be considered legally binding EXCEPT
beneficiary's consent