Ch. 1 Quiz - Principles of Insurance Flashcards
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer’s classification in Wyoming?
Foreign
Who might receive dividends from a mutual insurer?
Policyholders
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT:
The loss may be intentional
A producer who fails to segregate premium monies from his own personal funds is guilty of
Commingling
Courts will interpret any ambiguity in an insurance contract
In favor of the insured
An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act?
Direct response marketing
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
Which of the following is NOT a characteristic of an insurable risk?
The loss must be catastrophic
The authority granted to an agent through the agent’s contract is referred to as
Express authority
What insurance concept is associated with the names Weiss and Fitch?
Guides describing company financial integrity
What documentation grants express authority to an agent?
Agent’s contract with the principal
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
