Which of the following statements is true of insurance policies?
A)The basic principles of contract law apply to insurance policies.
B)Insurance companies tend to standardize their policies.
C)Some states forbid standardization of insurance policies.
D)All of the above.
E)(a) and (b), but not (c).

Question

Quizplus · Accepted Answer

The first statement is true, as insurance policies are essentially contracts between the policyholder and the insurer. The second statement is also true, as insurance companies often use standardized language and clauses in their policies to ensure consistency and clarity. The third statement, however, is not entirely true - while some states may impose restrictions on policy language or require certain provisions be included, there is no state that outright forbids standardization of insurance policies. Therefore, the correct answer is (E), which includes both (A) and (B) as true statements, but recognizes that (C) is not entirely accurate.

Which of the Following Statements Is True of Insurance Policies