Which of the following statements about “open-perils” coverage is (are) true? I. All losses are covered except those losses specifically excluded. II. The burden of proof is on the insured to prove that a loss is covered. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
What information is contained in the insuring agreement of an insurance policy? A) a description of the property or life to be insured B) a summary of the major promises of the insurer C) a summary of the obligations of the insured D) a list of the property, losses, and perils that are not covered […]
Date: September 19th, 2020
What is the practical effect of an insurance policy being a conditional contract? A) The insurer can refuse to a pay claim if the insured has not complied with all policy provisions. B) The insured can assign the policy only with the insurer’s consent. C) The insurer can sue the insured for failure to pay […]
Date: September 19th, 2020
The general rule that ambiguity in insurance contracts is construed against the insurer is reinforced by an important legal principle. This principle states the insured is entitled to coverage under a policy that he or she would assume the policy would provide, and exclusions must be conspicuous, plain, and clear. This principle is known as […]
Date: September 19th, 2020
Which of the following types of insurance policies can usually be assigned without the insurer’s consent? I. Life insurance II. Property insurance A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
Date: September 19th, 2020
Some states have a law that requires payment of the face amount of insurance to the insured if a total loss to real property occurs from a peril specified in the law. These laws are called A) agreed amount laws. B) replacement cost laws. C) homestead laws. D) valued policy laws. ANSWER Answer: […]
Date: September 19th, 2020
All of the following statements about the rules governing agency relationships are true EXCEPT A) An agent must be authorized to act on behalf of a principal. B) An agency agreement may grant certain powers to the agent as well as denying the agent other powers. C) The principal is responsible for the acts of […]
Date: September 19th, 2020
Some courts have ruled that an alternative to “replacement cost less depreciation” should be used to determine the actual cash value of a property loss. Under this alternative, the value of property lost is determined by the price a willing buyer would pay a willing seller for the property in a free market. This method […]
Date: September 19th, 2020
The voluntary relinquishment of a legal right is called A) subrogation. B) adhesion. C) estoppel. D) waiver. ANSWER Answer: D
Date: September 19th, 2020
Dave and Meagan Philips borrowed $150,000 from Fifth National Bank to help fund the purchase of a new home. The home serves as collateral for the loan. Fifth National has an insurable interest in the home based on A) potential responsibility for legal liability. B) being a secured creditor. C) expectation of ownership. D) having […]
Date: September 19th, 2020
