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Chapter 2 - The Insurance Contract Practice Quiz

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P & C Licensing Exam Prep: Ch 2 The Insurance Contract

Pregunta 1 de 25

4

An 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)

Selecciona una o más de las siguientes respuestas posibles:

  • Aleatory

  • Warranty

  • Contract of Adhesion

  • Representation

  • Unilateral

  • Conditional

  • Reasonable Expectation

  • Personal

  • Indemnity and Subrogation

  • Utmost Good Faith

Explicación

Pregunta 2 de 25

4

Four elements must be present for a contract to be legally enforceable. Name the four elements by choosing from the choices below.

Selecciona una o más de las siguientes respuestas posibles:

  • Consideration, Legal Purpose, Agreement, and Legally Competent Parties

  • Adhesion, Conditional, Subrogation, and Bipartisanship

  • Consideration, Agreement, Conditions, and Adhesion

Explicación

Pregunta 3 de 25

4

In 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.

Selecciona una o más de las siguientes respuestas posibles:

  • Competent Parties

  • Legal Purpose

  • Offer and Acceptance

  • Consideration

Explicación

Pregunta 4 de 25

4

In 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.

Selecciona una o más de las siguientes respuestas posibles:

  • Competent Parties

  • Legal Purpose

  • Offer and Acceptance

  • Consideration

Explicación

Pregunta 5 de 25

4

In 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?

Selecciona una o más de las siguientes respuestas posibles:

  • Competent Parties

  • Legal Purpose

  • Offer and Acceptance

  • Consideration

Explicación

Pregunta 6 de 25

4

In 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.

Selecciona una o más de las siguientes respuestas posibles:

  • Legal Purpose

  • Competent Parties

  • Offer and Acceptance

  • Consideration

Explicación

Pregunta 7 de 25

4

List the purpose of each part of an insurance policy.
A) The list who is insured, what property or risk is covered, when and where coverage is effective, and how much coverage applies.
B) describe what is covered and the perils the policy insures against.
C) The explain the rights and duties of the insured and the insurer under the policy.

Arrastra y suelta para completar el texto.

    Declaration
    Insuring Agreements
    conditions
    Endorsements
    Definitions
    waivers
    material facts

Explicación

Pregunta 8 de 25

4

The insurer must be able to rely on the insured's being forthcoming with all material facts needed to properly analyze or underwrite the risk.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 9 de 25

4

The insurer makes up all of the terms and conditions in a contract.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 10 de 25

4

The 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.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 11 de 25

4

A waiver means involuntarily giving up a known contractual right.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 12 de 25

4

Estoppel means trying to prevent someone from exercising a known right based on this or her previous actions.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 13 de 25

4

(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?

Selecciona una de las siguientes respuestas posibles:

  • 30 Days

  • 15 Days

  • 60 Days

  • 90 Days

Explicación

Pregunta 14 de 25

4

Payment of a deposit or provisional premium is required to bind coverage.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 15 de 25

4

A 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)

Selecciona una o más de las siguientes respuestas posibles:

  • The expiration date as shown on the binder

  • A warranty is nullified due to the insurer's omission of reasonable expectation

  • Rejection of the application by underwriting

  • The insurer waives a contractual right without state approval

  • Issuance of the policy

  • The insurer omits the premium from the binder

Explicación

Pregunta 16 de 25

4

The agent has binding authority.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 17 de 25

4

On 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?

Selecciona una de las siguientes respuestas posibles:

  • Material Fact

  • Representation

  • Concealment

Explicación

Pregunta 18 de 25

4

Selecciona la opción correcta de los menús desplegables para completar el texto.

INSTRUCTIONS: 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. ( definitions, declaration )
2. In this policy, "property damage" means physical injury to or destruction of property. ( Definitions, Declarations )
3. This policy does not cover any loss caused by earthquake. ( Declaration, Exclusion )
4. This policy may be canceled if the insured does not pay premiums when due. ( Insuring Agreements, Conditions )
5. This policy covers personal property owned or used by the insured. ( Insuring Agreements, Definitions )

Explicación

Pregunta 19 de 25

4

Match 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.

Selecciona una de las siguientes respuestas posibles:

  • Aleatory

  • Adhesion

  • Unilateral

Explicación

Pregunta 20 de 25

4

Match 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.

Selecciona una de las siguientes respuestas posibles:

  • Indemnity

  • Utmost Good Faith

  • Conditional

  • Aleatory

Explicación

Pregunta 21 de 25

4

Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Dependent on an uncertain event.

Selecciona una de las siguientes respuestas posibles:

  • Conditional

  • Aleatory

  • Unilateral

Explicación

Pregunta 22 de 25

4

Match the term describing an insurance contract with the statement that explains or defines it from the choices below.
STATEMENT: Insures a person.

Selecciona una de las siguientes respuestas posibles:

  • Indemnity

  • Conditional

  • Personal

Explicación

Pregunta 23 de 25

4

Match 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.

Selecciona una de las siguientes respuestas posibles:

  • Indemnity

  • Aleatory

  • Utmost Good Faith

Explicación

Pregunta 24 de 25

4

Match 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.

Selecciona una de las siguientes respuestas posibles:

  • Unilateral

  • Conditional

  • Adhesion

Explicación

Pregunta 25 de 25

4

Match 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.

Selecciona una de las siguientes respuestas posibles:

  • Adhesion

  • Utmost Good Faith

  • Conditions

Explicación

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