Policy Provision and Contract Law

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of loss

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

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 provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time?

Duties after loss

The declarations page of the homeowners policy provides all of the following information EXCEPT

A statement that earthquake damage is not covered

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 the property loss is known as

Appraisal

An insured insists that the insurer owes him $10k for liability damages, while the insurer asserts that they no more than $7k. Which of the following would most likely describes the type of claim settlement that the insured and insurer might pursue?

Arbitration

Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim?

Arbitration

In return for premium, an insurance company must

Be fair in underwriting and pay covered losses.

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's consent

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

The part of the policy that shows the amount of insurance, premium, and policy term is the

Declaration

The pro rata liability clause is designed to protect the principle of

Indemnity

Who is responsible for filling out a notice of claim form?

Insured

Persons covered under an insurance policy, whether named or not, are known as the

Insureds

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty

Which of the following would NOT be considered a source of insurability information by an insurer?

The applicants martial status

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Conditions

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

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsements

All of the following are found in the declarations section of a policy EXCEPT the

Exclusions

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 declaration page of a property or liability policy?

First named insured

The policy conditions define

How parties to the contract must act following a loss.

When would a misrepresentation on an insurance application be considered fraud?

If it is intentional and material

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured in called the

Insuring agreement

The Federal Fair Credit Reporting Act

Regulates consumer reports

What type of information would be found in a policy's insuring agreement?

Renewal dates

Which of the following acts created a federal program that should share the risk of loss from potential terrorist attacks with the insurance industry?

TRIA (Terrorist Risk Insurance Act)