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Risk Management

Business

Quiz 10 :

Structure and Analysis of Insurance Contracts

Quiz 10 :

Structure and Analysis of Insurance Contracts

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The exclusions in a named-perils policy are more definitive of coverage than in an open-perils policy.
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True False
Answer:

Answer:

False

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Insuring clauses do not vary greatly from policy to policy.
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True False
Answer:

Answer:

False

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Personal injury is the physical injury to a person, including the pain and suffering that may result.
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True False
Answer:

Answer:

False

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When an insurance policy is suspended, the effect is only temporary.
True False
Answer:
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The function of the agent is to induce a potential insured to make an offer.
True False
Answer:
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An open-perils policy provides broader coverage than a named-perils policy.
True False
Answer:
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Suspension of an insurance contract negates coverage as long as some condition exists.Once the condition is eliminated, protection reverts after a new agreement between the parties.
True False
Answer:
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Exclusions exist to limit coverage of nonfortuitous events.
True False
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A named-perils policy usually requires a higher premium than an open-perils policy.
True False
Answer:
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Losses due to wear and tear are excluded because they are accidental rather than inevitable.
True False
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Losses that are accidental make prediction difficult, cause coverage to be expensive, and represent circumstances in which coverage would be contrary to public policy.
True False
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Riders are used with life/health policies, whereas endorsements are used with property/casualty policies.
True False
Answer:
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More insurance is bought rather than sold.
True False
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Liability policies usually cover damage to or loss of others' property in the care, custody, or control of the insured because these properties are considered as the insured's properties.
True False
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The earthquake peril requires separate rating and is excluded from homeowners' policies.
True False
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Actual cash value and replacement cost are the most common means of valuing property loss.
True False
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Inherent vice is excluded in insurance coverage.
True False
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Health insurance policies often are written on an open-perils basis.
True False
Answer:
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All insurance policies specify the period of coverage.
True False
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A binder cannot be oral because it becomes very difficulty to prove its existence in case of a dispute.
True False
Answer:
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