Which of the following statements about insurable interest is NOT true?
A.) The seller of a home still has insurable interest in the home for up to 30 days after the deed has been transferred.
B.) A lending institution has an insurable interest in any pro
A.) The seller of a home still has insurable interest in the home for up to 30 days after the deed has been transferred.
The purpose of insurance is to accomplish which of the following?
A.) Eliminate risk
B.) Mitigate risk
C.) Avoid risk
D.) Transfer risk
D.) Transfer risk
An insurance contract in which the applicant cannot bargain for terms, rates, or benefits, and whose language is drafted completely by the insurance company is referred to as a(n):
A.) Unilateral contract
B.) Contract of Adhesion
C.) Aleatory contract
D.)
B.) Contract of Adhesion
To be binding, a contract between two parties must include all of the following EXCEPT a(n):
A.) Consideration
B.) Legal purpose
C.) Written instrument
D.) Offer and acceptance
C.) Written instrument
A customer request immediate coverage in a boat she just purchased. The Producer gives the customer an oral binder over the phone. Coverage commences:
A.) when the policy is delivered to the customer.
B.) when the written binder is received by the custome
D.) at the end of the initial conversation.
The principle under which the purchaser of insurance must be in a position to lose something of value is called:
A.) Indemnification
B.) Consideration
C.) Subrogation
D.) Insurable Interest
D.) Insurable Interest
All of the following statements about concealment are true EXCEPT that:
A.) Concealment is the failure to disclose a material fact.
B.) Concealment is an intentional misstatement on an application.
C.) Concealment must be intentional to affect the policy.
B.) Concealment is an intentional misstatement on an application.
A binder is:
A.) The same as a policy.
B.) A written document.
C.) A substitute for an insurance policy.
D.) An interim agreement between the parties.
D.) An interim agreement between the parties.
The Fair Credit Reporting Act requires that:
A.) The applicant cannot be advised of the name and address of the reporting agency.
B.) The insurance company, if requested, must provide the Federal Trade Commission with a list of applicants rejected during
D.) The applicant for insurance must be advised that a consumer report may be requested.
The insurer's promises to the insured would be found in/on the:
A.) Declarations page
B.) Provisions section
C.) Insuring clause
D.) Conditions section
C.) Insuring clause
Which of the following is the insurance company's consideration in a property and casualty contract?
A.) The oral or written binder
B.) The policy itself
C.) The promises contained in the policy
D.) The payment of a claim under the policy
C.) The promises contained in the policy
Jack Davis applies for insurance coverage on his factory. Most of the statements Jack makes on the application are considered to be a:
A.) Representation
B.) Warranty
C.) Misrepresentation
D.) Concealment
A.) Representation
Jack also tells the Producer that he has a sprinkler system in the factory and affirms that it is always operable. Jack's statement is a:
A.) Representation
B.) Warranty
C.) Misrepresentation
D.) Concealment
B.) Warranty
Although Jack responds truthfully yo all questions asked by the Producer over the telephone, he does not inform the Producer that the factory next door is on fire. If Jack presented a fire claim on hid factory later that same day, the company would probab
D.) Concealment
A written binder may terminate on all of the following dates EXCEPT:
A.) Its expiration date
B.) The policy issue date
C.) The policy application date
D.) The day after the notification is received that the company has cancelled the binder
C.) The policy application date
Which of the following statements is true about the principle of indemnity?
A.) It encourages the insured to purchase policies with face values larger than the value of the protected property.
B.) It states that the insured should not profit from a loss.
B.) It states that the insured should not profit from a loss.
All of the following are true concerning a Stock Company EXCEPT:
A.) It is owned by policyholders.
B.) It is owned by shareholders.
C.) It pays dividends to stockholders.
D.) It is a non-participating company.
A.) It is owned by policyholders.
The dollar limits for a specific coverage are found in the:
A.) Policy conditions
B.) Declarations
C.) Provisions section
D.) Insurance company's rate manual
B.) Declarations
Which of the following is a synonym for "indirect loss"?
A.) Consequential loss
B.) Total loss
C.) Partial loss
D.) Secondary loss
A.) Consequential loss