Casualty - Policy Provisions And Contract Law Flashcards
Property policy A is written for $10,000 and policy B is written for $30,000. If a $20,000 claim occurs, to whom will this loss be allocated?
A. Policy A will pay $5,000 and policy B will pay $15,000
B. Policy B will pay 100%
C. Policy A will pay 50% and policy B will pay 50%
D. Policy A is primary and policy B is excess
Answer: A.
When canceling a policy mid-term, the insurer must:
A. Have the first named insured sign a cancellation receipt
B. Give prior written notice to the first named insured
C. Refund the unearned premium on a short rate basis
D. Refund the earned premium on a pro-rate basis
Answer: B
An insurer domicile do in Canada authorized to do business in this state is considered a \_\_\_ insurer: A. Domestic B. Alien C. Foreign D. Reciprocal
Answer: B.
What states the time and date of claim, as well as the description of the loss? A. Statement of claim B. Proof of loss C. Statement of loss D. Notice of claim
Answer: D.
The covered perils would be found in which part of the policy? A. Exclusions B. Declarations C. Conditions D. Insuring agreement
Answer: D.
On a PAP, all of the following conditions describe the insured’s duties after a loss EXCEPT:
A. Notice of claim must be submitted to the insurer immediately, but need not be written
B. The police must be notified promptly if a covered auto is stolen
C. Notice of claim must be submitted to the insurer immediately and in writing
D. Cooperation with the insurer in the investigation settlement or defense of any claim
Answer: C.
In liability policies, supplementary payments:
A. Are subject to the overall policy limit
B. Have their own separate limits
C. Are payable in addition to the policy limit
D. Are limited to 10% of the overall policy limit
Answer: C.
The transfer of the insured's rights to the insurer after a loss is known as: A. Assignment B. Appraisal C. Subornation D. Arbitration
Answer: C.
The name of the insured would be found in what part of the policy? A. Insuring agreement B. Declarations C. Exclusions D. Conditions
Answer: B.
The insurer may require from the insured an assignment of all rights of recovery against any party for loss to the extent that payment has been made. This is known as: A. Subornation B. Assignment C. Waiver and estoppel D. Liberalization
Answer: A.
On a PAP, which person is not considered to be an insured? A. A person who steals your car B. Your spouse C. Your 15 year old son D. A friend you lend your car keys to
Answer: A.
On a casualty policy, where would you look to determine what is not covered? A. Declarations B. Insuring agreement C. Exclusions D. Conditions
Answer: C.
On an HO policy, all are true about subornation EXCEPT:
A. The insured waives rights of recovery against another party to the extent that payment is made by the insurer
B. It applies when a third party negligently causes property damage
C. It helps hold rates down
D. It applies to all parts of the policy
Answer: D.
The requirements to submit notice of claim and proof of loss are found in what part of the policy? A. Exclusions B. Conditions C. Insuring agreement D. Declaration
Answer: B.
