Business Law Chapter 36

If an insurer denies liability for a loss, the insured or the beneficiary of the policy has the burden of proving that there was a loss that came within the coverage of the policy.

True

In general, there is no requirement that an insurable interest exist at the time that a property insurance contract is created.

True

In most cases, both the policy and the general statute of limitations for contract actions set time limits for bringing suit on the policy.

True

Insurance is a contract by which one party for a stipulated consideration promises to pay another party a sum of money on the destruction of, loss of, or injury to something in which the other party has an interest, or to indemnify that party for any loss or liability to which that party is subjected.

True

The coverage of the Personal Auto Policy (PAP) is limited to claims arising from the "use and operation" of an automobile.

True

When a statute requires that all terms of the insurance contract be included in the written contract, the insurer cannot claim that a provision not stated in the written contract was binding on the insured.

True

A contract of insurance is to be interpreted as it would be understood by a person with technical knowledge of the law or of insurance.

False

An insurer may cancel any contract of insurance by the insurer's unilateral act as long as the insurer gives advance written notice.

False

For the purposes of fire insurance, all fires that cause damage are considered hostile fires.

False

Generally, the terms broker and agent are synonymous because both work directly for the insurer.

False

Subornation is the right of a party secondarily liable to stand in the place of the creditor after making payment to the creditor and to enforce the creditor's right against the party primarily liable in order to obtain indemnity from such primary party.

False

A coinsurance clause requires the insured to maintain insurance on the covered property up to a certain amount or a certain percent of the value, generally 80 percent.

True

A contract of insurance ordinarily is stated in a writing called a policy.

True

A homeowner's policy commonly provides protection from losses caused by theft.

True

A person who obtains life insurance generally can name anyone as beneficiary, regardless of whether that beneficiary has an insurable interest in the life of the insured.

True

An insurable interest in property must exist at the time that the loss is suffered, while an insurable interest in life must exist at the time that the policy is issued.

True

Any false statement in an application binds the insured.

True

Exceptions to coverage are generally strictly interpreted against the insurer.

True

Fire insurance is a personal contract, and in the absence of statutory or contractual authorization, it cannot be assigned without the consent of the insurer.

True

For the purposes of Personal Auto Policy (PAP) coverage, an insured person "uses" an automobile by unloading groceries from the car while it is parked in the garage.

True