P&c policy provisions and contract law
In insurance, an offer is usually made when
An applicant submits an aplication to the insurer
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 within
A specified time
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
Appraisal
An insurance contract must contain all of the following to be considered legally binding except
Beneficiary's consent
Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as
Cancellation
The abc corporation has 100,000 of coverage on its building through insurance comany 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
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
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
Which of the following is a mandatory part of an insurance policy that varies with each individual policy?
Declarations
Under the professional liability loss settlement provision, what must an insurer do before offering to pay claimant to settle a claim?
Get the insured's consent
Duties of the insurer found in property policy conditions include all of the following except
Notify the insured in the event of financial difficulty
Before an insurer will pay any loss under a policy, what is usually required from the insured?
Proof of Loss
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
The gramm-leach-billey act was passed to
Protect private customer information filed with a financial institution
Federal Fair Credit Reporting Act
Regulates consumer reports
Which of the following is not the consideration in a policy
The application given to a prospective insured
In terms of parties to a contract, which of the following does NOT describe a competent party?
The person must have at least completed secondary education.
Which of the following is a statement that is guaranteed to be true, and if untrue, may breech an insurance contract
Warranty
In forming an insurance contract, when does acceptance usually occur?
When an insurers underwriter aproves coverage
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
concealment
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
When a disagreement occurs as to how to settle a loss in a "fender bender" between two cars, what procedure is followed?
Arbrivation through the court
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 in the value of a property loss is known as
appraisal
All of the following are considered parts of the policy structure except
provisions
Which of the following would qualify as a competent party in an insurance contract?
The applicant has a prior felony conviction
When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy
All of the above
Which of the following describes the transfer of a legal right or interest in an insurance company?
Assignment
The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the
Exclusions
Which of the following would be named on the declarations page of a property of liability policy?
First name insureds
The policy conditions define
How parties to the contract must act following a loss.
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses
additional coverage
Which of the following would modify the original insurance contract by either adding or removing coverage
Endorsements
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information
The fair credit reporting act
