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Exam 35: Insurance

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Question 21

True/False

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Under a multiple insurance clause,a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it.

A) True
B) False

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Question 22

True/False

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A person can insure anything in which he or she has an insurable interest.

A) True
B) False

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Question 23

Multiple Choice

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Trial Lawyers,P.A.,obtains an insurance policy that protects its members against negligence claims by their clients.This is 

Portia is the beneficiary of a life insurance policy on Quentin's life obtained from Renewall Insurance Company through Stan,an insurance broker.The insured of this policy is 

The insured can cancel a policy at any time.

Home Insurance Company tells its customer Teri that she need not respond to questions about her national origin or race on her insurance application.Teri provides the information anyway.Home Insurance can 

Misstatements or misrepresentations in an application for insurance can affect the amount of a premium but cannot void a policy.

Liability insurance provides indemnity against losses in trade or losses caused by the dishonesty of employees. 

Orin is a doctor with Physicians Health Clinic,which obtains insurance from Quotient Insurance,Inc.,on Orin's life.Orin dies.The proceeds of the policy belong to 

A binder is an oral,temporary insurance policy.

Rafe obtains a fire insurance policy on his vacation cabin near Smoky Mountain from Torchlight Insurance Company.The cabin is lost in a fire,but the parties dispute the amount of Torchlight's liability under an ambiguous clause in the policy.A court would most likely 

Insurers can estimate fairly accurately the amount they will have to pay if they insure the members of a particular group.

Rob applies to Standard Insurance Company for a life insurance policy.On the application,Rob understates his age.Rob obtains the policy,but for a lower premium than he would have had to pay had he disclosed his actual age.The policy includes an incontestability clause.Five years later,Rob dies.Can Standard refuse payment on the policy?

A business organization cannot obtain insurance on the life of a person,even on the life of an individual who is important to that organization.

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

Ginny obtains a health-insurance policy for her family 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 or time,such as two or three years 

Lighting Concepts,Inc.,a trade fixture vendor and installer,wants to insure itself against injuries to employees sustained during the course of their employment.The policy covers claims not covered by workers' compensation insurance.Lighting Concepts should obtain 

Discount Retail Corporation obtains an insurance policy that provides indemnity against losses in trade or losses caused by the dishonesty of employees,the insolvency of debtors,or breaches of contract.This is 

An insurance company may cancel an insured's policy for any reason and at any time.

Adrian applies for,and obtains,casualty insurance coverage from Business Insurance Company for his business,Country Club,Inc.The effective date of the policy is the date