Question 1

A sibling may have an insurable interest in his or her sibling's life.

Accepted Answer

A) True 
 B)False

Question 2

EZ Rentals Company wants to insure the equipment that it rents to the public.To obtain insurance,EZ must have an insurable inter?est in the equipment

Accepted Answer

A) at any time. 
B) at the time a loss occurs. 
C) at the time a policy is obtained. 
D) continuously from the time a policy is obtained to the time a loss occurs. 
A) at any time. 
B) at the time a loss occurs. 
C) at the time a policy is obtained. 
D) continuously from the time a policy is obtained to the time a loss occurs.

Question 3

Grace applies for a homeowners' insurance policy on her house with Heroic Insurance Company through Ian,a broker.In this transaction,Ian is

Accepted Answer

A) an agent for both parties. 
B) Grace's agent,and not Heroic's agent. 
C) Heroic's agent,and not Grace's agent. 
D) not an agent. 
A) an agent for both parties. 
B) Grace's agent,and not Heroic's agent. 
C) Heroic's agent,and not Grace's agent. 
D) not an agent.

Question 4

Liability insurance protects against liability imposed on the insured as a result of injuries to the person or property of another.

Accepted Answer

A) True 
 B)False

Question 5

The existence of an insurable interest is a primary concern when determining liability under an insurance policy.

Accepted Answer

A) True 
 B)False

Question 6

Grover is an executive accountant with the firm of Hall & Associates,which ob?tains insurance from Interstate Insurance,Inc,on Grover's life.Grover dies.The proceeds of the policy belong to

Accepted Answer

A) Grover's heirs. 
B) Hall & Associates. 
C) Interstate Insurance. 
D) the state. 
A) Grover's heirs. 
B) Hall & Associates. 
C) Interstate Insurance. 
D) the state.

Question 7

Shingle & Tile Roofing Contractor,LLC,obtains an insurance policy against liability for injuries or losses sustained by employees during the course of their employment.The policy covers claims not covered by workers' compensation insurance.This is

Accepted Answer

A) casualty insurance. 
B) fidelity or guaranty insurance. 
C) key-person life insurance. 
D) employer's liability insurance. 
A) casualty insurance. 
B) fidelity or guaranty insurance. 
C) key-person life insurance. 
D) employer's liability insurance.

Question 8

A business may procure coverage for product liability under a comprehensive general liability policy.

Accepted Answer

A) True 
 B)False

Question 9

The insured can cancel a policy at any time.

Accepted Answer

A) True 
 B)False

Question 10

An insured's lack of an insurable interest is an absolute defense against payment.

Accepted Answer

A) True 
 B)False

Question 11

Insurance companies are prohibited from prac?ticing risk management.

Accepted Answer

A) True 
 B)False

Question 12

Boyce obtains from Capital Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy,an estimate of the value by an impartial third party can be de?manded.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 13

A party who would sustain a financial loss from the destruction of property has an insurable interest in it.

Accepted Answer

A) True 
 B)False

Question 14

Chocolate Gourmet Company obtains an insurance policy to pro?tect against losses incurred by the firm as a result of being held liable for per?sonal injuries or property damage sustained by others.This is

Accepted Answer

A) casualty insurance. 
B) fire insurance. 
C) life insurance. 
D) title insurance. 
A) casualty insurance. 
B) fire insurance. 
C) life insurance. 
D) title insurance.

Question 15

International Foods Corporation insures its real and personal property,as well as the lives of its key employees,to protect its financial interest should some event undermine its security.This is

Accepted Answer

A) risk management. 
B) risk pooling. 
C) risky. 
D) risqué. 
A) risk management. 
B) risk pooling. 
C) risky. 
D) risqué.

Question 16

An insured who has policies with several companies covering the same insurable interest has multiple insurance coverage.

Accepted Answer

A) True 
 B)False

Question 17

Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol?icy on Speedy's warehouse.On the application,Speedy misrepresents the age of the property to obtain a lower premium.When a fire soon destroys the ware?house,TransInsurance can

Accepted Answer

A) deny payment,because a fire destroyed Speedy's warehouse. 
B) deny payment,because of Speedy's fraud in the application. 
C) not deny payment,because a fire destroyed Speedy's warehouse. 
D) not deny payment,because the application is not part of the policy. 
A) deny payment,because a fire destroyed Speedy's warehouse. 
B) deny payment,because of Speedy's fraud in the application. 
C) not deny payment,because a fire destroyed Speedy's warehouse. 
D) not deny payment,because the application is not part of the policy.

Question 18

Term insurance provides life insurance with an accumulated cash surrender value that can be used as collateral for a loan.

Accepted Answer

A) True 
 B)False

Question 19

A loss sustained between the time of application and the delivery of an insurance policy may not be covered.

Accepted Answer

A) True 
 B)False

Question 20

General Allied Company obtains insurance policies with Hy-Rate Insurance,Inc. ,and Ideal InsurCo against the risk of loss of General's of?fice building in a fire.Each policy includes a multiple insurance clause.A fire partially destroys the building.General can collect from Hy-Rate

Accepted Answer

A) all of the loss. 
B) half of the loss. 
C) its proportionate share of the loss to the total amount of insurance. 
D) none of the loss. 
A) all of the loss. 
B) half of the loss. 
C) its proportionate share of the loss to the total amount of insurance. 
D) none of the loss.

Exam 51: B: Insurance

A sibling may have an insurable interest in his or her sibling's life.

EZ Rentals Company wants to insure the equipment that it rents to the public.To obtain insurance,EZ must have an insurable inter?est in the equipment

Grace applies for a homeowners' insurance policy on her house with Heroic Insurance Company through Ian,a broker.In this transaction,Ian is

Liability insurance protects against liability imposed on the insured as a result of injuries to the person or property of another.

The existence of an insurable interest is a primary concern when determining liability under an insurance policy.

Grover is an executive accountant with the firm of Hall & Associates,which ob?tains insurance from Interstate Insurance,Inc,on Grover's life.Grover dies.The proceeds of the policy belong to

Shingle & Tile Roofing Contractor,LLC,obtains an insurance policy against liability for injuries or losses sustained by employees during the course of their employment.The policy covers claims not covered by workers' compensation insurance.This is

A business may procure coverage for product liability under a comprehensive general liability policy.

The insured can cancel a policy at any time.

An insured's lack of an insurable interest is an absolute defense against payment.

Insurance companies are prohibited from prac?ticing risk management.

Boyce obtains from Capital Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy,an estimate of the value by an impartial third party can be de?manded.This is

A party who would sustain a financial loss from the destruction of property has an insurable interest in it.

Chocolate Gourmet Company obtains an insurance policy to pro?tect against losses incurred by the firm as a result of being held liable for per?sonal injuries or property damage sustained by others.This is

International Foods Corporation insures its real and personal property,as well as the lives of its key employees,to protect its financial interest should some event undermine its security.This is

An insured who has policies with several companies covering the same insurable interest has multiple insurance coverage.

Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol?icy on Speedy's warehouse.On the application,Speedy misrepresents the age of the property to obtain a lower premium.When a fire soon destroys the ware?house,TransInsurance can

Term insurance provides life insurance with an accumulated cash surrender value that can be used as collateral for a loan.

A loss sustained between the time of application and the delivery of an insurance policy may not be covered.

General Allied Company obtains insurance policies with Hy-Rate Insurance,Inc. ,and Ideal InsurCo against the risk of loss of General's of?fice building in a fire.Each policy includes a multiple insurance clause.A fire partially destroys the building.General can collect from Hy-Rate

A: Introduction to Law and Legal Reasoning

B: Introduction to Law and Legal Reasoning

C: Introduction to Law and Legal Reasoning

D: Introduction to Law and Legal Reasoning

A: Courts and Alternative Dispute Resolution

B: Courts and Alternative Dispute Resolution

A: Court Procedures

B: Court Procedures

A: Constitutional Authority to Regulate Business

B: Constitutional Authority to Regulate Business

A: Ethics and Business Decision Making

B: Ethics and Business Decision Making

A: Intentional Torts and Privacy

B: Intentional Torts and Privacy

A: Negligence and Strict Liability

B: Negligence and Strict Liability

C: Negligence and Strict Liability

D: Negligence and Strict Liability

A: Intellectual Property and Internet Law

B: Intellectual Property and Internet Law

A: Criminal Law and Cyber Crimes

B: Criminal Law and Cyber Crime

A: Nature and Terminology

B: Nature and Terminology

C: Nature and Terminology

D: Nature and Terminology

A: Agreement in Traditional and E-Contracts

B: Agreement in Traditional and E-Contracts

A: Consideration

B: Consideration

A: Capacity and Legality

B: Capacity and Legality

A: Mistakes,fraud,and Voluntary Consent

B: Mistakes,fraud,and Voluntary Consent

A: The Statute of Frauds

B: The Statute of Frauds

A: Third Party Rights

B: Third Party Rights

A: Performance and Discharge

B: Performance and Discharge

A: Breach of Contract and Remedies

B: Breach of Contract and Remedies

A: The Formation of Sales and Lease Contracts

B: The Formation of Sales and Lease Contracts

C: The Formation of Sales and Lease Contracts

D: The Formation of Sales and Lease Contracts

A: Title,risk,and Insurable Interest

B: Title,risk,and Insurable Interest

A: Performance Breach of Sales Lease Contracts

B: Performance Breach of Sales Lease Contracts

A: Warranties and Product Liability

B: Warranties and Product Liability

A: International Law in a Global Economy

B: International Law in a Global Economy

A: The Function Creation of Negotiable Instruments

B: The Function Creation of Negotiable Instruments

C: The Function Creation of Negotiable Instruments

D: The Function Creation of Negotiable Instruments

A: Transferability and Holder in Due Course