Test
P & C Licensing Exam Prep: Ch 2 The Insurance Contract
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Preguntas del test (25)
1An insurance policy has a distinguishing set of features that reflects the nature of this unique contract. Choose the characteristics of an insurance contract from the list below. (choose all that apply)
- AAleatory
- BWarranty
- CContract of Adhesion
- DRepresentation
- EUnilateral
- FConditional
- GReasonable Expectation
- HPersonal
- IIndemnity and Subrogation
- JUtmost Good Faith
2Four elements must be present for a contract to be legally enforceable. Name the four elements by choosing from the choices below.
- AConsideration, Legal Purpose, Agreement, and Legally Competent Parties
- BAdhesion, Conditional, Subrogation, and Bipartisanship
- CConsideration, Agreement, Conditions, and Adhesion
3In the following statement, choose which of the four elements of a valid contract is MISSING:
Thomas agrees to burn down Jason's bar & grille restaurant for $10,000.- ACompetent Parties
- BLegal Purpose
- COffer and Acceptance
- DConsideration
4In the following statement, choose which of the four elements of a valid contract is MISSING:
Melissa's insurance policy is canceled for nonpayment of premium.- ACompetent Parties
- BLegal Purpose
- COffer and Acceptance
- DConsideration
5In the following statement, choose which of the four elements of a valid contract is MISSING:
JAG Insurance Company denies Craig's application for auto insurance. Which element is missing?- ACompetent Parties
- BLegal Purpose
- COffer and Acceptance
- DConsideration
6In the following statement, choose which of the four elements of a valid contract is MISSING:
Matthew, age 17, signs a lease for an apartment in Highland Park Estates for a term of 12 months with an option to renew at the end of the 12-month period, provided he has demonstrated a good payment history.- ALegal Purpose
- BCompetent Parties
- COffer and Acceptance
- DConsideration
7List the purpose of each part of an insurance policy.
A) The [blank_start]Declaration[blank_end] list who is insured, what property or risk is covered, when and where coverage is effective, and how much coverage applies.
B) [blank_start]Insuring Agreements[blank_end] describe what is covered and the perils the policy insures against.
C) The [blank_start]conditions[blank_end] explain the rights and duties of the insured and the insurer under the policy.- ADeclaration
- BInsuring Agreements
- Cconditions
- DEndorsements
- EDefinitions
- Fwaivers
- Gmaterial facts
8The insurer must be able to rely on the insured's being forthcoming with all material facts needed to properly analyze or underwrite the risk.
- AVerdadero
- BFalso
9The insurer makes up all of the terms and conditions in a contract.
- AVerdadero
- BFalso
10The insurer is the one who writes the contract and is legally obligated; so, in the event of dispute with a question about an ambiguity in the contract, the court will rule in favor of the insurer.
- AVerdadero
- BFalso
11A waiver means involuntarily giving up a known contractual right.
- AVerdadero
- BFalso
12Estoppel means trying to prevent someone from exercising a known right based on this or her previous actions.
- AVerdadero
- BFalso
13(Virginia Law) Contracts are usually in a written form, but in the insurance industry it is not unusual for agents to place coverage in force before the insurer has an opportunity to issue the policy. This action is called binding coverage and can be done verbally or in writing. In the state of Virginia, the BINDER is good for what length of time?
- A30 Days
- B15 Days
- C60 Days
- D90 Days
14Payment of a deposit or provisional premium is required to bind coverage.
- AVerdadero
- BFalso
15A binder is a temporary contract of insurance and is valid for a short period of time. Binders cease at the earliest of the following listed circumstances or occurrences. (choose all that apply)
- AThe expiration date as shown on the binder
- BA warranty is nullified due to the insurer's omission of reasonable expectation
- CRejection of the application by underwriting
- DThe insurer waives a contractual right without state approval
- EIssuance of the policy
- FThe insurer omits the premium from the binder
16The agent has binding authority.
- AVerdadero
- BFalso
17On the recommendation of her father, Bonnie decided to submit an application for insurance coverage to NIG Insurance Co. The agent asked her about her past driving record, which did include 3 speeding tickets in the last 2 years. Bonnie wanted to get the coverage, so on the application, she checked the "yes" box to the question, "Have you had any moving violations in the last 3 years?". This act, as defined under Utmost Good Faith, is an example of what?
- AMaterial Fact
- BRepresentation
- CConcealment
18INSTRUCTIONS: Read the following policy excerpts and label them as 1) declarations, 2) insurance agreements, 3) conditions, exclusions. or definitions.
1. Named insured and mailing address: Leah Bachman, 11491 Bretson Rd., Elysium, VA 22616. [blank_start]__________________[blank_end]
2. In this policy, "property damage" means physical injury to or destruction of property. [blank_start]_________________________[blank_end]
3. This policy does not cover any loss caused by earthquake. [blank_start]________________________[blank_end]
4. This policy may be canceled if the insured does not pay premiums when due. [blank_start]_______________________[blank_end]
5. This policy covers personal property owned or used by the insured. [blank_start]_______________________[blank_end]- Adefinitions
- Bdeclaration
- CDefinitions
- DDeclarations
- EDeclaration
- FExclusion
- GInsuring Agreements
- HConditions
- IInsuring Agreements
- JDefinitions
19Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Prepared by one party, with little or no opportunity for bargaining by the other party.- AAleatory
- BAdhesion
- CUnilateral
20Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Insurer relies on insured's statements and insured relies on insurer's ability to fulfill its promises.- AIndemnity
- BUtmost Good Faith
- CConditional
- DAleatory
21Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Dependent on an uncertain event.- AConditional
- BAleatory
- CUnilateral
22Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Insures a person.- AIndemnity
- BConditional
- CPersonal
23Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: After a loss occurs, an individual is restored to the approximate financial condition she was in before the loss.- AIndemnity
- BAleatory
- CUtmost Good Faith
24Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: One-sided contract; only the insurance company is legally bound to perform under the contract.- AUnilateral
- BConditional
- CAdhesion
25Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Includes conditions that both the insured and the insurer must comply with.- AAdhesion
- BUtmost Good Faith
- CConditions
Información
- Descripción
- Chapter 2 - The Insurance Contract Practice Quiz
- Autor
- ltcolonelswife
- Idioma
- English
- Visitas
- 84
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