Chapter 2
Adhesion
An insurance contract feature that permits all ambiguous areas to be construed in favor of the insured is
Loss settlement is reduced by 15%
Under a Business owners Policy, if the insured property is vacant beyond 60 Days
To provide excess Insurance
All of the following are Characteristics of Reporting Forms, EXCEPT:
Bilateral Contract
All of the following are characteristics of insurance contracts EXCEPT
Loss of rental income to the apartment
All of the following are direct losses EXCEPT
Incompetent parties
All of the following are essential elements of a contract EXCEPT:
Reporting requirements may be waived by the insured.
All of the following are true of timely reporting requirements of reporting forms EXCEPT
Paint and related solvents stored in original containers
All of the following would be considered a hazard EXCEPT
Find in favor of the insured since the policy is a contract of adhesion
How will court of law interpret an Insurance contract that contains policy language that is ambiguous?
Coverage will apply
If a property is determined to be unoccupied at the time of loss
Moral Hazard
Illegal gambling or the illegal use of narcotics would be an example of a
Subrogation
The legal right of an insurance company to seek reimbursement from a negligent third party is
The cause of loss
The perils covered in a policy may be described as
Promote proper values and proper coverage amounts.
The primary purpose of the full reporting or honesty clause is to
Indemnification
The principle of insurance that restores one to approximately the same condition that they enjoyed prior to their loss is
Coverage may be verbally bound with no premium by an appointed insurance agent
To place insurance coverage into effect
Consideration
Under an insurance contract, both the insured and insurer give up something of value which is:
Concealment
What term describes the failure to disclose a fact to the application for insurance
Representations
What term describes the statements made by an individual at application
Actual physical damage to an insured risk
Which of the following definitions best describe a direct loss?
Provides coverage for direct loss unless specifically excluded
Which of the following definitions best describes Special (Open Peril) coverage
Only perils listed in the policy are covered
Which of the following definitions best describes Specific (Named Peril) Coverage
The results or consequences of a direct loss
Which of the following definitions best describes an indirect or consequential loss
Ethical Hazard
Which of the following is NOT a common type of hazard
Guaranteed Warranty
Which of the following is NOT a type of warranty
Fire to a house
Which of the following would be an example of a direct loss?
Manuscript Coverage
Which one of the following is NOT a common means of writing property insurance