Ch 35 Insurance

What type of insurance is written for a specified number of years and terminates at the end of that period?

Term insurance

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

False

Insurance designed to protect an insured driver or owner from the claims of others is called:

Liability insurance

An insurance broker generally is an independent contractor who is not employed by any one insurance company.

True

The promises of the insurer are found in the insurance policy.

True

The promisor in an insurance contract is called the underwriter.

True

Mike Reilly suffered the loss of his home as a result of a chimney fire that was caused by the ignition of soot in the chimney. This fire would be described as: ______.

a hostile fire

An insurer who wrongfully refuses to defend the insured is liable for: ______.

breach of contract

Part of every whole life insurance premium covers the cost of insurance. The remainder of the premium is devoted to the investment component of the policy, which builds up ove

cash surrender value

Paul purchased a house and also purchased fire insurance coverage on the house. The policy contained an 80 percent coinsurance clause. Paul maintained coverage in the amount of $150,000 and the value of the house was $250,000. A fire caused a loss of $100,000. Paul will collect:

only part of the $100,000 loss, because he failed to maintain coverage at 80 percent of the value of the house.