Exam 27: Insurance Law

Mary submitted an application for life insurance and named her husband Bob as the beneficiary of the $250,000 death benefit that would pay out after her death.Before the application was approved,Mary passed away.Does Bob receive the $250,000?

If an insurance applicant sustains losses after submission of the application but before acceptance by the insurer,the rule in most states is that the insurer must nevertheless cover the losses.

Which types of losses are least likely to be covered by fire insurance policies?

A homeowner's policy typically will cover damage to real property and to personal property by a peril.

Fred's homeowner's insurance policy requires Fred to have a working sprinkler system.Fred's sprinkler system breaks.Before he can get it fixed,there is a fire.Who is responsible for Fred's losses?

Joe's home is damaged both by a forest fire and by water from the fire hoses.What is likely to be covered?

Elvisco,Inc.owns the building that houses its business.Elvisco obtained a property insurance policy on the building from Graceland Mutual Insurance Co.The policy,whose face amount was $200,000,contained a 75 percent coinsurance clause.The building had a fair market value of $400,000.While the policy was in effect,the covered peril of fire caused $90,000 of damage to the building.Elvisco has filed a claim and proof of loss with Graceland Mutual.How much is Graceland Mutual obligated to pay Elvisco?

If the insured misrepresented material facts in the application for insurance,the insurance policy becomes void.

With respect to property insurance,the insurable interest requirement:

What lawsuit should an insurer file to resolve uncertainty over whether it must defend a policyholder under the scope of a liability policy?