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 […]
Date: September 19th, 2020
Which distinct legal characteristic of insurance contracts states that only the insurer’s promise to perform is legally enforceable? A) contracts of adhesion B) unilateral contracts C) aleatory contracts D) personal contracts ANSWER Answer: B
Date: September 19th, 2020
When must an insurable interest legally exist in life insurance? A) only at the time of the insured’s death B) only at the inception of the policy C) only at the time the beneficiary is paid D) both at the time of the insured’s death and at the inception of the policy ANSWER […]
Date: September 19th, 2020
Sue’s office building was damaged by a fire caused by a careless tenant. After paying Sue for the loss, the insurance company sued the tenant to recover its loss. This suit is based on the principle of A) warranty. B) insurable interest. C) utmost good faith. D) subrogation. ANSWER Answer: D
Date: September 19th, 2020
When must an insurable interest legally exist in property insurance for an insured to receive payment for a loss from the insurer? A) only at the time of the loss B) only at the inception of the policy C) only at the time the loss settlement takes place D) both at the time of the […]
Date: September 19th, 2020
Which of the following statements about subrogation is true? A) It is used primarily for losses paid under life insurance policies. B) It allows the insurer to sue its own insured who is negligent. C) The insured’s right to collect benefits may be forfeited if the insured interferes with the insurer’s subrogation rights after a […]
Date: September 19th, 2020
What is the legal significance of a material misrepresentation in an insurance application? A) The contract is automatically voided from its inception. B) The contract is voidable at the insurer’s option. C) Loss payments are reduced by the degree of the misrepresentation. D) The insurer is immediately entitled to a higher premium. ANSWER […]
Date: September 19th, 2020
A false material statement made by an applicant for insurance is an example of A) concealment. B) breach of warranty. C) lack of offer and acceptance. D) misrepresentation. ANSWER Answer: D
Date: September 19th, 2020
What is the legal significance of a material concealment by an insurance applicant? A) The contract is automatically voided from its inception. B) The contract is voidable at the insurer’s option. C) Loss payments are reduced by the degree of the concealment. D) The insurer is immediately entitled to a higher premium. ANSWER […]
Date: September 19th, 2020
The principle of utmost good faith is supported by all of the following legal doctrines EXCEPT A) representations. B) warranty. C) subrogation. D) concealment. ANSWER Answer: C
Date: September 19th, 2020
