The authority of an agent to perform all incidental acts necessary to fulfill the purposes of the agency agreement is called A) implied authority. B) declared authority. C) apparent authority. D) express authority. ANSWER Answer: A
Date: September 19th, 2020
The policy provision requiring the filing of proof of loss with the insurer is an example of a(n) A) declaration. B) condition. C) insuring agreement. D) miscellaneous provision. ANSWER Answer: B
Date: September 19th, 2020
Why can an insurer refuse to pay a claim if an insured fails to abide by the policy provisions? A) because insurance contracts are aleatory B) because insurance contracts are unilateral C) because insurance contracts are conditional D) because insurance contracts are contracts of adhesion ANSWER Answer: C
Date: September 19th, 2020
Why does the insured get the benefit of the doubt if an insurance policy contains any ambiguities or uncertainties? A) because insurance contracts are aleatory B) because insurance contracts are unilateral C) because insurance contracts are conditional D) because insurance contracts are contracts of adhesion ANSWER Answer: D
Date: September 19th, 2020
Melody’s car was damaged when another driver ran a stop sign and hit her car. Melody decided to collect from her own insurer and to let her insurer recoup the loss payment from the negligent driver who hit her. What fundamental legal principle is illustrated in this scenario? A) the principle of utmost good faith […]
Date: September 19th, 2020
Janice purchased a living room set for $1,000 and insured this furniture on an actual cash value basis. Two years later the living room set was destroyed by a covered peril. At the time of loss, the property had depreciated in value by 25 percent. The replacement cost of the furniture at the time of […]
Date: September 19th, 2020
Jacob sold his house to Shelia for $140,000 in cash. Jacob “threw in” insurance on the house as part of the deal and did not bother telling the insurer that there was a new owner. Four months after Shelia purchased the home, a windstorm damaged the roof. Which of the following legal characteristics of insurance […]
Date: September 19th, 2020
Robin plans to open a bar in a high-crime area. She had difficulty obtaining insurance for the business. She found an insurer willing to write the coverage, but only if Robin agreed to have a security alarm system in operation at all times when the business is closed. Robin’s promise to have a security alarm […]
Date: September 19th, 2020
Ted’s insurance claim was denied by XYZ Insurance Company. When Ted inquired why the claim was denied, he was told to, “Read the exclusion on page 5 of the policy.” Ted read the exclusion. In his opinion, the exclusion was poorly worded and vague. If a court of law agrees with Ted’s assessment of the […]
Date: September 19th, 2020
When Ben applied for life insurance, he was asked on the application if he smoked or used tobacco products. Ben answered “No.” In reality, Ben smokes two packs of cigarettes a day. The policy was issued at the “preferred, nonsmoker rate.” If Ben dies 6 months after the policy is issued, upon what grounds will […]
Date: September 19th, 2020
