Question 1

Insurance companies deal with risk through risk dodging .

Accepted Answer

A) True 
 B)False

Question 2

Bram applies for a homeowners' insurance policy with Castle Insurance Inc. through Dian, an agent. In this transaction, Dian is

Accepted Answer

A)  an agent for both parties. 
B)  Bram's agent, not Castle's agent. 
C)  Castle's agent, not Bram's agent . 
D)  an agent for neither party. 
A)  an agent for both parties. 
B)  Bram's agent, not Castle's agent. 
C)  Castle's agent, not Bram's agent . 
D)  an agent for neither party.

Question 3

Dino is the beneficiary of a life insurance policy on Erin's life obtained from Fidelity Insurance LLC through Gillian, Fidelity's agent. The insured of this policy is

Accepted Answer

A)  Dino. 
B)  Erin . 
C)  Fidelity Insurance. 
D)  Gillian. 
A)  Dino. 
B)  Erin . 
C)  Fidelity Insurance. 
D)  Gillian.

Question 4

Clark obtains from Dependable Insurance Inc. a policy that provides if a dispute arises between the parties concerning the settlement of a claim, the dispute must be submitted to an impartial third party, not a court, for resolution. This is

Accepted Answer

A)  an antilapse clause. 
B)  an arbitration clause. 
C)  an appraisal clause. 
D)  an incontestability clause. 
A)  an antilapse clause. 
B)  an arbitration clause. 
C)  an appraisal clause. 
D)  an incontestability clause.

Question 5

Irene obtains an insurance policy that protects her against some risks of loss to the contents of her residence. This is

Accepted Answer

A)  homeowners' insurance. 
B)  key-person insurance . 
C)  group insurance. 
D)  liability insurance. 
A)  homeowners' insurance. 
B)  key-person insurance . 
C)  group insurance. 
D)  liability insurance.

Question 6

If there is no ambiguity in an insurance policy, the policy generally is interpreted against the insurance company.

Accepted Answer

A) True 
 B)False

Question 7

Life insurance requires that an insurable interest in the continued life of the insured exist when a policy is obtained.

Accepted Answer

A) True 
 B)False

Question 8

An insurance company can raise as a defense against payment on a policy any of the defenses that would be valid in an ordinary action on a contract.

Accepted Answer

A) True 
 B)False

Question 9

Energy Inc. obtains an insurance policy with Fidelity Insurance Inc. that provides if the parties cannot agree on the amount of a covered loss, either party can demand an estimate by an impartial and qualified third party. This is

Accepted Answer

A)  an antilapse clause. 
B)  an arbitration clause. 
C)  an appraisal clause. 
D)  an incontestability clause. 
A)  an antilapse clause. 
B)  an arbitration clause. 
C)  an appraisal clause. 
D)  an incontestability clause.

Question 10

A binder is a written, permanent insurance policy.

Accepted Answer

A) True 
 B)False

Question 11

Estimable Credit Company loans funds to Farmland Granaries, LLC, to buy a silo. Estimable obtains an insurance policy from Grangers Insurance, Inc., to cover the silo. Farmland also obtains a policy from Grangers to cover the silo. Later, Farmland sells the silo to Hi-Yield Harvest Company but keeps the policy. Hi-Yield also obtains a policy from Grangers to cover the silo. Estimable agrees to finance Hi-Yield's purchase of the property. A fire totally destroys the silo. Who can recover for the loss?

Accepted Answer

Estimable has an insurable interest in t

Question 12

Gina obtains an insurance policy from Hope Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for a specified period of time, such as two or three years

Accepted Answer

A)  Gina cannot enter a contest sponsored by Hope or its affiliate. 
B)  Gina cannot contest Hope's refusal to pay a claim under the policy. 
C)  Hope cannot contest Gina's eligibility for continued coverage. 
D)  Hope cannot contest Gina's statements in the application. 
A)  Gina cannot enter a contest sponsored by Hope or its affiliate. 
B)  Gina cannot contest Hope's refusal to pay a claim under the policy. 
C)  Hope cannot contest Gina's eligibility for continued coverage. 
D)  Hope cannot contest Gina's statements in the application.

Question 13

Insurance companies deal with risk by

Accepted Answer

A)  confining the risk to a small number of people. 
B)  avoiding the risk through legal tactics. 
C)  spreading the risk among a large number of people. 
D)  imposing the risk on third-party individuals and businesses. 
A)  confining the risk to a small number of people. 
B)  avoiding the risk through legal tactics. 
C)  spreading the risk among a large number of people. 
D)  imposing the risk on third-party individuals and businesses.

Question 14

Greta applies for a homeowners' policy with Homewood Insurance Company through Ivy, an insurance agent. As a general rule, Homewood is bound by

Accepted Answer

A)  Ivy's acts. 
B)  Greta's acts. 
C)  the acts of both Greta and Ivy. 
D)  the acts of neither Greta nor Ivy. 
A)  Ivy's acts. 
B)  Greta's acts. 
C)  the acts of both Greta and Ivy. 
D)  the acts of neither Greta nor Ivy.

Question 15

World Hotels, Inc., insures its real and personal property to protect its financial interest should some event undermine its security. This is risk

Accepted Answer

A)  management. 
B)  pooling. 
C)  dodging. 
D)  imposition. 
A)  management. 
B)  pooling. 
C)  dodging. 
D)  imposition.

Question 16

Insurance is a contract in which the insurer promises to reimburse the insured or a beneficiary in the event of a loss.

Accepted Answer

A) True 
 B)False

Question 17

Insurance protection may compensate for

Accepted Answer

A)  the injury or death of the insured or another. 
B)  the injury or death of someone other than the insured . 
C)  such losses as those resulting from lawsuits. 
D)  all of the choices. 
A)  the injury or death of the insured or another. 
B)  the injury or death of someone other than the insured . 
C)  such losses as those resulting from lawsuits. 
D)  all of the choices.

Question 18

An insurer can cancel a policy because the insured has appeared as a witness in a case against the insurance company.

Accepted Answer

A) True 
 B)False

Question 19

Under an appraisal clause , ordinarily the insured has a grace period within which to pay an overdue premium before the policy is canceled.

Accepted Answer

A) True 
 B)False

Question 20

Incontestability clauses prevent the insurer from asserting certain defenses.

Accepted Answer

A) True 
 B)False

Exam 35: Insurance

Insurance companies deal with risk through risk dodging .

Bram applies for a homeowners' insurance policy with Castle Insurance Inc. through Dian, an agent. In this transaction, Dian is

Dino is the beneficiary of a life insurance policy on Erin's life obtained from Fidelity Insurance LLC through Gillian, Fidelity's agent. The insured of this policy is

Clark obtains from Dependable Insurance Inc. a policy that provides if a dispute arises between the parties concerning the settlement of a claim, the dispute must be submitted to an impartial third party, not a court, for resolution. This is

Irene obtains an insurance policy that protects her against some risks of loss to the contents of her residence. This is

If there is no ambiguity in an insurance policy, the policy generally is interpreted against the insurance company.

Life insurance requires that an insurable interest in the continued life of the insured exist when a policy is obtained.

An insurance company can raise as a defense against payment on a policy any of the defenses that would be valid in an ordinary action on a contract.

Energy Inc. obtains an insurance policy with Fidelity Insurance Inc. that provides if the parties cannot agree on the amount of a covered loss, either party can demand an estimate by an impartial and qualified third party. This is

A binder is a written, permanent insurance policy.

Gina obtains an insurance policy from Hope Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for a specified period of time, such as two or three years

Insurance companies deal with risk by

Greta applies for a homeowners' policy with Homewood Insurance Company through Ivy, an insurance agent. As a general rule, Homewood is bound by

World Hotels, Inc., insures its real and personal property to protect its financial interest should some event undermine its security. This is risk

Insurance is a contract in which the insurer promises to reimburse the insured or a beneficiary in the event of a loss.

Insurance protection may compensate for

An insurer can cancel a policy because the insured has appeared as a witness in a case against the insurance company.

Under an appraisal clause , ordinarily the insured has a grace period within which to pay an overdue premium before the policy is canceled.

Incontestability clauses prevent the insurer from asserting certain defenses.

Introduction to the Law

Ethics in Business

The Courts and Our Legal System

Constitutional Law

Business Torts

Intellectual Property

Business Crimes

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

The Legality of Agreements

Voluntary Consent

Written Contracts

Third Party Rights

Termination and Remedies

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Negotiable Instruments: Transfer and Liability

Banking in the Digital Age

Agency Relationships

Employment, Immigration, and Labor Law

Employment Discrimination

Types of Business Organizations

Formation and Ownership of a Corporation

Management of a Corporation

Combining and Dissolving a Corporation

Credit and Security

Mortgages

Bankruptcy

Personal Property

Bailments

Real Property

Landlord and Tenant Law

Wills and Trusts

Administrative Law

Antitrust Law

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