Policy provisions and contract laws

The part of a property policy that shows the amount of insurance, premium, and policy term is the: A. insuring clause B. conditions C. endorsements D. declarations

declarations

Which of the following is a mandatory part of an insurance policy that varies with each individual policy? A. insuring agreement B. declarations C. conditions D. exclusions

declarations

The part of the policy that clarifies terms in the policy is the: A. Exclusions B. Conditions C. Insuring agreement D. definitions

definitions

Which of the following would modify the original insurance contract by either adding or removing coverage? A. flexible policy B. endorsements C. additional coverage form D. conditions

endorsements

All of the following are found in the declarations section of a policy EXCEPT: A. limits of insurance B. exclusions C. policy premiums D. name of the insured

exclusions

Who is responsible for filling out a notice of claim form? A. agent B. insurer C. insured D. adjuster

insured

In forming an insurance contract, when does acceptance usually occur? A. when an insured submits an application B. when an insurer's underwriter approves coverage C. when an insurer delivers the policy D. when an insurer receives an application

when an insurer's underwriter approves coverage

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the: A. exclusions B. declarations C. insuring agreements D. conditions

insuring agreements

For a contract to be enforceable by law, the purpose of the contract must be: A. for the benefit of the general public B. of pure intent C. legal and not against public policy D. for financial gain

legal and not against public policy

What type of information would be found in a policy's insuring agreement? A. location of premises B. policy limits C. insurer's address D. renewal date

renewal dates

Which of the following would NOT be considered a source of insurability info by an insurer? A. the applicants marital status B. interviews with the applicants neighbors C.motor vehicle records D. insurance history

the applicants marital status

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?: A. unfair trade practices law B. the guaranty association C. consumer privacy act D. the fair credit reporting act

the fair credit reporting act

In return for a premium, an insurance company must a) Provide the insured with coverage adequate for all potential losses. b) Use standardized tables of coverage for specific risks to be excluded from coverage. c) Give the insurer valuable consideration d) Be fair in underwriting and pay covered losses.

be fair in underwriting and pay covered losses

an insurance contract must contain all of the following to be considered legally binding EXCEPT: A. competent parties B. beneficiary's consent C. offer and acceptance D. consideration

beneficiary's consent

When applying for an individual life insurance policy, an applicant states he went to the doctor for nausea, but fails to mention that he also had severe chest pains. This is an example of: A. warranty B. concealement C. misrepresentation D. fraud

concealment

The proof of loss statement must be: A. an oral statement B. In writing C. both oral and in writing D. in video tape format

in writing

the pro rata liability clause is designed to protect the principle of: A. indemnity B. subrogation C. insurable interest D. waiver and estoppel

indemnity

All of the following are considered parts of the policy structure EXCEPT: A. insuring clause B. conditions C. provisions D. exclusions

provisions

Federal Fair Credit Reporting Act: A. regulates consumer reports B. protects customer privacy C. regulates telemarketing D. prevents money laundering

regulates consumer reports

A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely? A. the policy will be cancelled B. the homeowner should let the friend take over the premium payments C. the friend will have to apply for coinsurance from another insurance company D. the homeowner will need to get written consent from the insured

the homeowner will need to get written consent from the insured

The ABC Corporation has $100,000 of coverage on its building through insurance company 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? A. company A will pay $24,000; Company B will pay $0 B. Company A will pay $16,000; Company B will pay $8,000 C. Company A will pay $20,000; Company B will pay $4,000 D. Company A wil pay $12,000; Company B will pay $12,000

Company A will pay $16,000 Company B will pay $8,000

What is a material misrepresentation? A. any misstatement made by an applicant for insurance B. any misstatement by a producer C. concealment D. a statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

a statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

In insurance, an offer is usually made when: A. the agent hands the policy to the policyholder B. an agent explains a policy to a potential application C. an applicant submits an application to the insurer D. the insurer approves the application and receives the initial premium

an applicant submits an application to the insurer

Which of he following is NOT an essential element of an insurance contract? A. legal purpose B. counter offer C. consideration D. agreement

counter offer

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: A. third-party provision B. appraisal C. coinsurance D. loss valuation

appraisal

In terms of parties to a contact, which of the following does NOT describe a competent party? A. The person must be mentally competent to understand the contract B. the person must have at least completed secondary education C. the person must not be under the influence of drugs D. the person must be of legal age

the person must have at least completed secondary education

When a disagreement occurs as to how to settle a loss in a "fender bender" between two cars, what procedure is followed? A. arbitration through the court B. lawsuit is filed C. appeal to the DOI D. the adjusters first opinion must be accepted

arbitration through the court

When would a misrepresentation on an insurance application be considered fraud?: A. any misinterpretation is considered fraud B. if it is intentional and material C. Never; statements by the applicant are only representations D. When the application is incomplete

if it is intentional and material

Duties of the insurer found in property policy conditions include all of the following EXCEPT: A. Provide advance notice of cancellation B. return any premiums to the insured C. notify the insured in the event of financial difficulty D. pay covered losses

notify the insured in the event of financial difficulty

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? A. primary and excess B. other insurance C. valid insurance D. non concurrency

other insurance