Chapter 1-I: Interest, Subrogation, and Claims

In Florida, an insurer has ___ days to pay or deny a claim. A. 90 B. 15 C. 30 D. 100

A. 90

The conditions page in an insurance contract may allow a lender all of the following provisions EXCEPT: A. allowing the lender to cancel the insurance policy at any time. B. permitting the lender to pay the policy premium if the insured fails to do so to maintain coverage. C. promising to give the lender notice if the policy is canceled, reduced, or has expired without payment. D. allowing a lender to be listed as a payee on the policy.

A. allowing the lender to cancel the insurance policy at any time.

Adam is shopping for a car in a local automobile dealership. While visiting the showroom, he trips over a rug that has folded over and breaks his arm in the fall. Which of the following is true? A. Adam may file a first party claim with the dealership's insurance company. B. Adam may file a third party claim with the dealership's insurance company. C. The automobile dealership may file a first party claim with its own insurance company. D. The automobile dealership may file a third party claim with its own insurance company.

B. Adam may file a third party claim with the dealership's insurance company.

Which of the following does NOT have an insurable interest in Big Ed's Steak House, a local restaurant? A. ABC Bank, which holds the mortgage on Big Ed's Steak House. B. Ed, who owns 51% of the restaurant. C. Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant. D. Ed's partner, Bill, who owns 49% of the restaurant.

C. Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant.

Sally throws a cigarette butt into Neal's dumpster, starting a fire on Neal's property that costs him $10,000. Neal files a claim with his insurer. The insurer pays Neal and then demands $10,000 from Sally to pay for the loss she caused. What gives the insurer the right to collect payment from Sally? A. Estoppel B. Vicarious liability C. Subrogation D. Right of recovery

C. Subrogation

An insurance adjuster will do all of the following regarding a claim EXCEPT: A. determine if the claim falls under the coverage of the insurance policy. B. investigate the claim. C. protect the insurer from the claim. D. decide whether the claim has any merit.

C. protect the insurer from the claim.

Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totaling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance, and both Cam and Flora submit claims against this policy for their damages. Which of the following is TRUE? A. Flora will file a first-party claim for the damage to Cam's billboard and a third-party claim for the damage to her car. B. Flora will file a third-party claim for the damage to her car, and Cam will file a first-party claim for the damage to his billboard. C. Flora will file a third-party claim for the damage to Cam's billboard and a first-party claim for the damage to her car. D. Flora will file a first-party claim for the damage to her car, and Cam will file a third-party claim for the damage to his billboard.

D. Flora will file a first-party claim for the damage to her car, and Cam will file a third-party claim for the damage to his billboard.

Which of the following statements about insurable interest is FALSE? A. Insurable interest reduces the incentive for someone to cause damages intentionally to insured property. B. Purchasing an insurance policy on your home helps protect your insurable interest in a home. C. When a renter leases your house, your insurable interest in the home remains. D. Maintaining property values allows your neighbor to have an insurable interest in your house.

D. Maintaining property values allows your neighbor to have an insurable interest in your house.

When damages or losses fall under the terms of an insurance contract: A. the policyholder immediately forfeits his right to collect compensation from the negligent party, because of the subrogation condition. B. an adjuster files the third-party claim on behalf of the policyholder. C. the policyholder must wait a period of five days before filing a third-party claim. D. the policyholder has an immediate right to claim payment according to the terms of the policy.

D. the policyholder has an immediate right to claim payment according to the terms of the policy.

James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in injuries from the accident. He has personal injury protection of $10,000 from his own automobile insurance policy, which immediately pays him the full amount. By accepting $10,000 from his own insurance company, James has waived the right to sue Andrea for more than _____ for personal injury. A. $12,000 B. $5,000 C. $10,000 D. $2,000

D.$2,000