Risk Management

Business

Quiz 9 :

Fundamental Doctrines Affecting Insurance Contracts

Quiz 9 :

Fundamental Doctrines Affecting Insurance Contracts

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A mortgage lender on a building does not have an insurable interest in the building.
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True False
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False

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Unlike intoxicated persons, mentally ill persons are not recognized as competent.
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True False
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False

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An agency relationship cannot be created by estoppel, even if the conduct of the principal implies that an agency exists.
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True False
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False

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The purpose of the insurance contract is to restore the insured to the same economic position as before the loss.
True False
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In property insurance, insurable interest must exist at the time of the loss.
True False
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The company has the right to refuse business provided by suspended agents when it is presented, but once the business is accepted, the company waives the right to deny coverage on the basis of denial of acceptance.
True False
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Even if people misrepresent material facts, insurers cannot void their contracts because the insureds have policies as proof and the insurers' right to deny would be waived.
True False
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The insurance contract we receive when we transfer risk to the insurance company is the only thing makes the exchange tangible.
True False
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An insurance policy is voidable even if the misrepresentation is not material.
True False
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In the case of contracts other than for insurance, it is generally assumed that each party has equal knowledge and access to the facts, and thus each is subject to requirements of "good faith," not "utmost good faith.
True False
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To waive a right, a person must know he or she has the right and must give it up intentionally.
True False
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The conditional binder provides coverage immediately, even if the applicant is later found to be an unacceptable policyholder and coverage is canceled at that point.
True False
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Most insurance contracts are prepared by the insured and then accepted or rejected by the insurer.
True False
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Janitor's insurance is inexpensive life insurance coverage.
True False
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Contracts cannot be oral due to the difficulties in proving the existence of oral contracts.
True False
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In the making of insurance contracts, the insurer usually offers to sell and the insured accepts or rejects the offer.
True False
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No insurance agent is going to ask you when you apply for insurance if the neighbor's house is on fire.The fact that the agent does not ask does not relieve you of the responsibility.
True False
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The source of the agent's authority is the policyholder.
True False
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Lack of consideration will cause the contract to be unenforceable.
True False
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Neither insurers nor regulators consider an agency relationship as an independent contractor relationship.
True False
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Showing 1 - 20 of 74