Ch 2

A person who is not named as an insured on the declarations page of the policy but is protected by the policy is known as the

Additional Insured

In return for premium, an insurance company must

Be fair in underwriting and pay covered losses.

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?

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

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

Concealment

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicant's knowledge.

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

The part of property policy that shows the amount of insurance, premium, and policy term is the

Declarations

Who is responsible for filling out a notice of claim form?

Insured

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify he insured in the event of financial difficulty.

A sworn written statement that must be furnished by the insured to the insurer before any loss under a policy can be paid is called

Proof of loss

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of loss

All of the following are considered parts of the policy structure EXCEPT

Provisions

In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within

A specified time.

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss.