Question 1

When a person makes a payment to an insurance agency for insurance coverage, this payment is known as an annuity.

Accepted Answer

A) True 
 B)False

Question 2

Kim is involved in a motor vehicle accident. She is sued by the driver of the other vehicle. Kim calls her insurance agent, Samir, and tells him to handle it for her. Later, Samir asks her to provide some information regarding the accident and to give a deposition in litigation. Kim says that she is too busy at work and that Samir should simply handle the matter because that is the reason she has insurance; and that, furthermore, Samir should not call her again regarding the accident. Is Kim correct about her duties and why or why not?

Accepted Answer

Kim is incorrect regarding her duties in...

Question 3

If the insured or insurer fails to meet an obligation under the insurance contract, what cause of action might the other party have?

Accepted Answer

A)   Breach of duty
B)   Breach of implied warranty
C)   Breach of good faith and fair dealing
D)   Breach of contract
E)   Breach of warrantyF) A) and E)
G) A) and B)

Question 4

Under which of the following circumstances would an insurer pay the beneficiary in the event of the insured's death?

Accepted Answer

A)   War
B)   Execution
C)   Suicide
D)   Accidental
E)   Life insurance policies cover all causes of death.F) A) and E)
G) All of the above

Question 5

A person who is unable to work due to disability is protected by life insurance.

Accepted Answer

A) True 
 B)False

Question 6

Who is the person that is named on an insurance policy that will receive the insurance proceeds in the event of an injury or damage?

Accepted Answer

A)   Payee
B)   Receiver
C)   Insured
D)   Beneficiary
E)   PayorF) None of the above
G) A) and D)

Question 7

Car insurance may be canceled if the insured loses his or her license because of a driving violation.

Accepted Answer

A) True 
 B)False

Question 8

[Insurance Incident] Ace Photo, a company specializing in wild animal photography, took out a life insurance policy through ABC Insurance on its president, Ringo, and an insurance policy on the company-owned jeep that he drove. Some time later, Ringo got a better offer from Flash Company, another company specializing in the photography of wild animals, and went to work for them. He parted on good terms with Ace Photo, and took the jeep under the mistaken idea that it was part of his severance benefits. Neither of the insurance policies was cancelled by Ace Photo. Unfortunately, while photographing a lion for Flash Company, Ringo was attacked and eaten. His jeep was then stolen by a bystander. Ace Photo had been in the process of contacting Ringo in an attempt to obtain possession of the jeep but had not reacquired it at the time of his death. Ace Photo had renewed the policy on the jeep, reaffirming to the insurer that its purpose was for use by Ace Photo employees because Ace Photo planned to have possession of the vehicle shortly. Ace Photo filed a claim to collect on the life insurance policy and also on the vehicle policy. ABC Insurance denied both claims.
-Which statement is true regarding the contention of ABC Insurance that it is not required to pay to Ace Photo the amount for which Ringo's life was insured?

Accepted Answer

A)   ABC Insurance Company is incorrect because Ace Photo held an economic interest in Ringo's life at the time the insurance was purchased.
B)   ABC Insurance Company is correct because Ace Photo no longer had an economic interest in Ringo's life.
C)   ABC Insurance Company is correct only if Ringo's new employer had purchased life insurance on his life.
D)   ABC Insurance Company is incorrect because Ace Photo had an economic interest in Ringo based on his possession of the jeep that Ace Photo still owned.
E)   ABC Insurance Company is incorrect only if Ace Photo owed Ringo retirement or some other sort of benefit.F) A) and B)
G) A) and C)

Question 9

If a person has an insurable interest in property, which of the following is required for the person to collect the beneficiary payment when there is a loss?

Accepted Answer

A)   The person must have had an interest in the property at the time of the loss.
B)   The person must have had an interest in the property before the loss.
C)   The person must have had an interest in the property at anytime during coverage.
D)   The person must make a claim to the insurer within 14 days of the loss.
E)   The person must make a claim to the insurer within 30 days of the loss.F) C) and D)
G) A) and C)

Question 10

Which of the following best describes the insured's duty to cooperate with the insurer?

Accepted Answer

A)   The insured must provide information regarding the incident that led to the claim.
B)   The insured must provide information regarding the incident that led to the claim and provide a deposition within 30 days of the claim.
C)   The insured must provide information regarding the incident but does not have to provide self-incriminating information.
D)   The insured must provide information regarding the incident unless he or she is being sued as a result of the incident.
E)   The insured must provide information he or she finds relevant to the incident that led to the claim.F) B) and C)
G) A) and E)

Question 11

Daria's property is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation?

Accepted Answer

A)   Daria should demand an appraisal under her policy's appraisal clause.
B)   Daria has no alternative because she must accept the insurer's valuation.
C)   The insurer is required to accept Daria's valuation unless the insurer can establish that the insured failed to act in good faith.
D)   Daria should call the state inspector who investigates and makes rulings in such cases.
E)   Daria should file for a field evaluation.F) None of the above
G) All of the above

Question 12

________ suggests people who are insulated from risk sometimes behave differently

Accepted Answer

A)   Moral hazard
B)   Negligence
C)   Strict liability
D)   Coverage insulation
E)   Coverage protectionF) None of the above
G) All of the above

Question 13

A business should purchase a(n)  ________ that protects against a broad range of risks that the firm can specify, including personal injury suits by customers and suits by competitors over intellectual property

Accepted Answer

A)   commercial general liability policy
B)   risk against harm policy
C)   commercial harm against loss policy
D)   open-ended commercial policy
E)   exact liability policyF) A) and E)
G) C) and D)

Question 14

Which of the following was the result on appeal in Equity Fire & Casualty Company v. Laurence Traver, the case in the text in which an insured on a policy of automobile insurance mailed a premium to the insurer, but it did not reach the insurer prior to the expiration date of the policy; and the insurer refused to provide coverage for a motor vehicle accident that occurred after the expiration date of the policy and before the premium was received?

Accepted Answer

A)   The court ruled that coverage was required under the policy because of the mailbox rule.
B)   The court ruled that coverage was not required under the policy because of the mailbox rule.
C)   The court ruled that coverage was not required under the policy because the insured did not meet his obligation of seeing that the premium amount was received by the insurer in a timely manner.
D)   The court ruled that coverage was required because the insured had a grace period of 7 days in order for the payment to arrive.
E)   The court ruled that under the unique facts of the case, there was acceptance of the renewal offer preventing a lapse of the policy.F) A) and E)
G) A) and B)

Question 15

Which of the following was the result of the "Case Opener", in which the Clarys contended that when the privilege to rebuild or repair property is reserved in a policy, and the insurer asserts that privilege and begins repair and restoration, the insurer cannot later abandon the restoration and change its election to paying for the loss?

Accepted Answer

A)   The courts ruling supported the Clarys' argument that having elected to repair the property, Allstate breached the contract by abandoning the restoration.
B)   The court asserted that the Clarys' were correct and Allstate was obligated to pay after its initial election.
C)   The court denied the trial court's entry and summary judgement in favor of the Clarys'.
D)   The court required a percentage split be determined by an arbitrator for the loss, to be divided between the Clarys and Allstate.
E)   The court rejected the Clarys' argument that once Allstate elected to repair the property, the amount of loss was no longer at issue.F) C) and E)
G) A) and B)

Question 16

When can an insured party cancel an insurance policy?

Accepted Answer

A)   At any time
B)   Once he or she is released from the insured
C)   When he or she has paid the required amount of premiums under the policy
D)   When he or she notifies the insurer and provides a 30-day notice of his or her intent to cancel the policy.
E)   When he or she notifies the insurer and provides a 45-day notice of his or her intent to cancel the policy.F) B) and D)
G) C) and D)

Question 17

Which of the following best describes the insured's duty to disclose information to the insurer?

Accepted Answer

A)   The insured must disclose all material information on the application.
B)   The insured must disclose all material information on the application and fully and truthfully answer any questions.
C)   The insured must fully and truthfully answer any questions.
D)   The insured must disclose all information on the application and fully and truthfully answer any questions.
E)   The insured must disclose all information on the application and answer only relevant questions to the best of his or her ability.F) A) and C)
G) A) and E)

Question 18

A policy which covers some type of business risk is known as commercial insurance, such as ________.

Accepted Answer

A)   business loss insurance
B)   profit and loss insurance
C)   fidelity insurance
D)   economic duress insurance
E)   risk of harm insuranceF) B) and E)
G) A) and E)

Question 19

Prophet's parents bought insurance that provides a specific sum of money upon their deaths to Prophet. Prophet is considered a(n)  ________

Accepted Answer

A)   payee
B)   consumer
C)   profit sharer
D)   designated beneficiary
E)   annuity payeeF) B) and D)
G) A) and B)

Question 20

Which of the following is not a type of property insurance?

Accepted Answer

A)   Fire
B)   Casualty
C)   Livestock
D)   Water
E)   Natural forcesF) C) and D)
G) D) and E)

Exam 51: Insurance Law

Car insurance may be canceled if the insured loses his or her license because of a driving violation.

Correct Answer
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Correct Answer
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Which of the following best describes the insured's duty to cooperate with the insurer?

Correct Answer
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Correct Answer
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When can an insured party cancel an insurance policy?

Correct Answer
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When a person makes a payment to an insurance agency for insurance coverage, this payment is known as an annuity.

Correct Answer
verified

Who is the person that is named on an insurance policy that will receive the insurance proceeds in the event of an injury or damage?

Correct Answer
verified

Correct Answer
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Kim is incorrect regarding her duties in...
View Answer

A business should purchase a(n) ________ that protects against a broad range of risks that the firm can specify, including personal injury suits by customers and suits by competitors over intellectual property

Correct Answer
verified

If the insured or insurer fails to meet an obligation under the insurance contract, what cause of action might the other party have?

Correct Answer
verified

A person who is unable to work due to disability is protected by life insurance.

Correct Answer
verified

If a person has an insurable interest in property, which of the following is required for the person to collect the beneficiary payment when there is a loss?

Correct Answer
verified

Under which of the following circumstances would an insurer pay the beneficiary in the event of the insured's death?

Correct Answer
verified

A policy which covers some type of business risk is known as commercial insurance, such as ________.

Correct Answer
verified

Daria's property is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation?

Correct Answer
verified

Correct Answer
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Which of the following best describes the insured's duty to disclose information to the insurer?

Correct Answer
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________ suggests people who are insulated from risk sometimes behave differently

Correct Answer
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Which of the following is not a type of property insurance?

Correct Answer
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Prophet's parents bought insurance that provides a specific sum of money upon their deaths to Prophet. Prophet is considered a(n) ________

Correct Answer
verified

Exam 51: Insurance Law

Car insurance may be canceled if the insured loses his or her license because of a driving violation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following best describes the insured's duty to cooperate with the insurer?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When can an insured party cancel an insurance policy?

Correct AnswerverifiedShow Answer

When a person makes a payment to an insurance agency for insurance coverage, this payment is known as an annuity.

Correct AnswerverifiedShow Answer

Who is the person that is named on an insurance policy that will receive the insurance proceeds in the event of an injury or damage?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedKim is incorrect regarding her duties in...View AnswerShow Answer

A business should purchase a(n) ________ that protects against a broad range of risks that the firm can specify, including personal injury suits by customers and suits by competitors over intellectual property

Correct AnswerverifiedShow Answer

If the insured or insurer fails to meet an obligation under the insurance contract, what cause of action might the other party have?

Correct AnswerverifiedShow Answer

A person who is unable to work due to disability is protected by life insurance.

Correct AnswerverifiedShow Answer

If a person has an insurable interest in property, which of the following is required for the person to collect the beneficiary payment when there is a loss?

Correct AnswerverifiedShow Answer

Under which of the following circumstances would an insurer pay the beneficiary in the event of the insured's death?

Correct AnswerverifiedShow Answer

A policy which covers some type of business risk is known as commercial insurance, such as ________.

Correct AnswerverifiedShow Answer

Daria's property is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following best describes the insured's duty to disclose information to the insurer?

Correct AnswerverifiedShow Answer

________ suggests people who are insulated from risk sometimes behave differently

Correct AnswerverifiedShow Answer

Which of the following is not a type of property insurance?

Correct AnswerverifiedShow Answer

Prophet's parents bought insurance that provides a specific sum of money upon their deaths to Prophet. Prophet is considered a(n) ________

Correct AnswerverifiedShow Answer

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Kim is incorrect regarding her duties in...
View Answer

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