Policy Provisions and Contract Law

What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?

$10,000

If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss?

$8,000

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss?

Appraisal Clause

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

Beneficiary's consent

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

Conditions

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

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

Insured

The type of insurance used to cover goods for one specific trip is called

Trip Transit

Under the HO-4 and HO-6 homeowners policy forms, property is insured against

broad form perils

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

insuring agreement

Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

The policy conditions define

How parties to the contract must act following a loss.

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

Notify the insured in the event of financial difficulty.

In a dwelling policy, which of the following other structures would be covered?

Rented to a neighbor for use as a private garage.

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage