General Insurance Property & Causality Louisiana
An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only option is to reject the policy or accept it as is. Which contract feature does this describe?
Adhesion
What documentation grants express authority to an agent?
Agent's contract with the principal
An insured pays $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristics of an insurance contract does this describe?
Aleatory
Because an agent is using stationary with 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
What is surplus insurance?
Insurance placed with an unauthorized insurer
Which statement regarding insurable risk is NOT correct?
Insureds cannot be randomly selected
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation
If an insurance underwriter discovers that an applicant for a policy has been convicted of submitting a fraudulent claim to an insurer in the past, the application may be rejected as a
Moral Hazard
Illegal use of narcotics would be an example of a
Moral Hazard
What is the definition of a unilateral contract?
One-sided: only one party makes an enforceable promise
A participating insurance policy may do which of the following?
Pay dividends to the policy owner
All of the following are examples of risk retention except
Premiums
A situation in which a person can only lose or have no change represents
Pure Risk
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
A peril is defined as:
The cause of the loss insured against.
In insurance, an offer is usually made when
The completed application is submitted
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible?
The insured will need a written consent of the insurer
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss must be intentional
Which of the following is an example of a producers fiduciary duty?
The trust that a client places in the producer in regard to handling premiums
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of a loss
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
Unilateral
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
All of the following are examples of hazards EXCEPT
A fire in the kitchen of a home
The owner of a small business applies for a fire insurance policy with limits equal to 100% of the property's value. The owner has huge unsold inventories and a large personal gambling debt. From an underwriting standpoint, this might indicate
A moral hazard
For the purpose of insurance, risk is defined as
the uncertainty or chance of loss
What is material misrepresentation?
A statement made by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
The proposed insured makes the premium on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
Conditional
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of Adhesion
Which of the following best describes an insurance company that has been formed under the laws of this state?
Domestic
Which of the following is a unit of measurement an underwriter uses when determining the premium rates of insurance?
Exposure
Which are the following are the authorities that an agent can hold?
Expressed and Implied
The causes of loss insured against an insurance policy are known as
Perils