Finance

All of the following statements about endorsements and riders are true

All of the following statements about endorsements and riders are true EXCEPT A) They are usually written. B) They can be used to add or delete policy provisions. C) They normally take precedence over other conflicting policy provisions. D) They are primarily used to circumvent legislation requiring specific policy provisions.     ANSWER Answer: D

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Date: September 19th, 2020

Jacob sold his house to Shelia for $140,000 in cash. Jacob “threw in”

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 […]

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Date: September 19th, 2020

Robin plans to open a bar in a high-crime area. She had difficulty obt

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 […]

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Date: September 19th, 2020

Ted’s insurance claim was denied by XYZ Insurance Company. When Ted in

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 […]

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Date: September 19th, 2020

When Ben applied for life insurance, he was asked on the application i

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 […]

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Date: September 19th, 2020

Dave is an agent for Easy Pay Insurance. Easy Pay insures only high-qu

Dave is an agent for Easy Pay Insurance. Easy Pay insures only high-quality applicants. Dave wanted to earn more commissions, so he sold some policies to applicants he knew were below-average risks. When these policyowners started filing claims, Easy Pay tried to deny the claims stating that Dave had not acted appropriately. Which general rule […]

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Date: September 19th, 2020

Mark owns a bar. The bar has a back room where Mark has some slot mach

Mark owns a bar. The bar has a back room where Mark has some slot machines. Mark lets some of his patrons play the machines, and Mark keeps any profits. This type of gambling is illegal where Mark lives. Mark wanted to purchase insurance in case his slot machines were confiscated by the police. Such […]

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Date: September 19th, 2020

What is the practical effect of an insurance policy being a conditiona

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 […]

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Date: September 19th, 2020