Exam 16: Insurance and Guarantee

A tenant carelessly drops a candle,and the resulting fire destroys the landlord's premises.The landlord's loss is fully covered under the landlord's fire insurance policy,and the insurance company compensates the landlord for the loss.In these circumstances,

A comprehensive general insurance policy is one that covers most types of damage or loss to an insured's property as well as providing third party liability.

Co-insurance is a technique used by insurance companies to

A's building is insured by B Co.under a standard policy that covers all loss occasioned by fire.A's business is not doing well,and A figures that if his building is destroyed by fire,he can put part of the insurance proceeds into his business to keep it running.One evening,A starts a fire in his building that subsequently destroys it.In this case,

To be entitled to the proceeds of an insurance policy,a person must have an economic interest in the property that is the subject matter of the insurance policy.

Nancy missed a payment on her signature loan to Pacific Bank.The bank threatened to bring her to court unless she could pledge some assets or find someone to be a guarantor.Nancy's friend Lynn agreed to sign as guarantor provided Nancy wouldn't tell Lynn's husband.In response to Lynn's promise,what is the necessary consideration for the guarantee?

Simon purchased for cash a used boat and trailer from Haggard Maritime Inc.at 4:56 p.m.He phoned his insurance agent and asked if he could get insurance immediately so he could bring the boat and trailer home.The agent said,"You are covered as of 12:01 noon today." Simon got into a traffic accident at 6:32 p.m.the same day,whereby the boat and trailer were severely damaged.Will the insurance company pay this claim?

If an insured has been negligent,the insurance policy will generally be void.

A building owned by X Company is insured for $100 000,but the insurance contract contains an 80 percent co-insurance clause.The building is damaged by fire to the amount of $20 000.The depreciated replacement value of the insured property is $250 000.The insurance company will then pay

An insurance contract is one that is usually said to require utmost good faith on the part of the parties.

Kathleen,feeling quite depressed,decides that a few rounds of Russian Roulette would cheer her up.Unfortunately,she loses.Two years earlier,a life insurance policy was issued to her mother,Joan.Will the insurance company pay Joan under this policy? Discuss the legal basis for the insurance company's argument that they are not liable.

Explain the difference between an insurance agent and an insurance broker.

Where certain terms are changed in a policy,the document that records the changes is not an endorsement.

A wants to insure his business property and contacts his insurance agent,who has agency contracts with a number of different insurance companies.The agent prepares a binder of insurance and sends it to A.A few days later,A receives the insurance policy.In this case,the contract is made

Leah,while driving her vehicle on a narrow road in the mountains,comes to a bridge that does not appear very stable.After considering her alternatives for a moment,she decides to drive over the bridge.The bridge collapses and her vehicle is destroyed.Is the insurance company liable on her car insurance policy? What legal arguments could they raise if they wish to deny coverage?

A wants to buy a building to use as a warehouse.A has seen the building he wants to buy and knows the purchase price is $500 000.00.A calls his agent and tells him he wants immediate insurance on the building.He gives him all the particulars and tells him to insure the building for $500 000.00,which the agent proceeds to do.After a month of negotiations,A finally enters into an agreement of purchase and sale,and two weeks later he becomes the owner of the building.A half a year later,the building is badly damaged by fire.In this case,

Donna owns a commercial building that has a small retail shop,three offices,and a small warehouse.Each unit is rented out to a different company.She has taken out a standard fire insurance policy for the appraised value of the building.On July 1st,the building and its contents are destroyed by fire.The cause of the fire was never determined.Which of the following is true?

A wants to obtain life insurance for himself and contacts his insurance agent,who arranges the policy with an insurance company.A few days later,the insurance policy is issued and then it is delivered to A,but it requires him to pay the first premium,which he does.In this case,the contract is made

What is the purpose of insurance,and how does it achieve its purpose?

The act of forbearance of some deed at the request of the guarantor is usually consideration to the guarantor in a contract of guarantee.