Unit 2 Practice Questions

which of the following individuals would be considered a competent party in an insurance contract a. Curt, who turns 12 at the end of year b. Stephen, who is 21, does not have a job, and lives at home with his parents c. Maria, who has been drinking heavily at a bar prior to meeting with her insurance agent d. Alexis, who recently was diagnosed as mentally insane

Stephen, who is 21, does not have a job, and lives at home with his parents

which of the following term describes a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration a. an offer b. an acceptance c. a contract d. a consideration

a contract

Jill is filling out an insurance application with information that she believes to be true. the information that she is providing is considered a. a representation b. a misrepresentation c. a material misrepresentation d. a warranty

a representation

a guarantee that something is true is a. a representation b. a misrepresentation c. a material misrepresentation d. a warranty

a warranty

a statement that is guaranteed to be true is a. a warranty b. a representation c. an impersonation d. a misrepresentation

a warranty

in insurance contract is prepared by one party (the insurance company) with little or no opportunity for the other party (the insured) to bargain. This characteristic is called a. conditional b. unilateral c. aleatory d. adhesion

adhesion

The failure to disclose known facts is a. material misrepresentation b. concealment c. waiver d. fraud

concealment

Allison's auto insurance policy is due on the 10th of each month. Ever since she has had the policy, she has sen the premium in on the 16th of the month. The insurer has been accepting the premium this way for the past 5 years. A new CEO takes over and decides to cancel Allison's policy for a nonpayment of premium. Allison contests this decision and legally gets the policy reinstated. The decision to reinstate the policy is an example of a. waiver b. adhesion c. aleatory d. estoppel

estoppel

Anthony intentionally lied on his insurance application to obtain coverage. This is an example of a. concealment b. fraud c. estoppel d. adhesion

fraud

misrepresentations do not necessarily void insurance contracts. To do so, they must be a. material b. unilateral c. personal d. warranties

material

an agreement between two parties is also called a. adhesion b. aleatory c. offer and acceptance d. unilateral

offer and acceptance

in an insurance contract, the consideration that the insured gives is called a. the premium payment b. the offer c. the acceptance d. the agreement

the premium payment

which of the following is not an element of a legal contract a. offer b. acceptance c. legal purpose d. unilateral

unilateral