Chapter 1 Claims and Law Flashcards
Misrepresentation is best demonstrated by what?
a. Policyholder falsely describing the risk when purchasing the policy
b. Insurer not mitigating its loss when a claim occurred
c. Insurer making a promise and then later revoking it
d. Changes to the risk throughout the policy period
a. Policyholder falsely describing the risk when purchasing the policy
Which statement is the best example of misrepresentation?
a. The applicant gives an erroneous description of the risk when taking out the insurance.
b. The insurer did not limit the damage when a loss occurred.
c. The insurer makes a promise that it then retracts.
d. The risk changed during the insurance period.
a. The applicant gives an erroneous description of the risk when taking out the insurance.
What is an example of an affirmative warranty?
a. The insured warrants that the sprinkler system is and will be maintained in operating condition.
b. The insured warrants that a watchdog is and will be used to guard the premises.
c. The insured warrants that the anti-theft camera surveillance system is and will be in operation at all times.
d. The insured has never had a loss.
d. The insured has never had a loss.
What occupation is excluded from being an adjuster?
a. Public adjuster acting on behalf of the policyholder
b. Field adjuster employed directly by the insurance company
c. Person who acts as an adjuster of marine losses only
d. Independent adjuster hired by the insurer to handle a specific claim
c. Person who acts as an adjuster of marine losses only
What is a void contract?
a. One that will be judged never to have existed and to have had no effect from the beginning
b. One where the injured party can choose to proceed or declare the contract void
c. A policy that has expired
d. One where the contract was canceled by the insured
a. One that will be judged never to have existed and to have had no effect from the beginning
Under what rights does the insured become subrogated as soon as he pays a loss?
a. The insurer’s commitment rights
b. Replacement Value Fees
c. Rights relating to value on the day of loss
d. Rights of subrogation
d. Rights of subrogation
A blank proof of loss form must be provided to a policyholder within how many days of the notice of loss as set out in the insurance acts of the common law provinces and territories?
a. 30
b. 90
c. 60
d. 120
c. 60
What is a void contract?
a. A contract that is deemed never to have existed and never to have produced effects
b. A contract that allows the aggrieved party to declare the contract valid or void
c. An insurance contract that has ended
d. A contract that the insured has terminated
a. A contract that is deemed never to have existed and never to have produced effects
In evaluating whether an insured has an insurable interest in an object, what must a loss adjuster determine?
a. Actual cash value of the object
b. Amount the insured paid for it and its replacement cost
c. Whether the object is the subject matter of the policy
d. Whether the object was a gift and the contractual element of consideration was met
c. Whether the object is the subject matter of the policy
Which statement best describes the legal concept of a contractual relationship?
a. It limits the scope of influence of the contract to the parties to the contract.
b. It ensures the confidentiality of the information exchanged between the third party and the insurer.
c. It allows the assignment of an insurance contract to a party outside the contract.
d. It gives the insured the possibility to transfer the indemnity to any other person.
a. It limits the scope of influence of the contract to the parties to the contract.
What is the task of independent adjusters?
a. Engage the liability of the insurer when the responsibility clearly lies with the insured
b. Investigate and report on claims entrusted to them
c. Pay claims and submit invoices to insurers for reimbursement
d. Take shortcuts to reduce costs when the outcome of the claim is predictable
b. Investigate and report on claims entrusted to them
What is an example of an express warranty?
a. The insured warrants that the sprinkler installation is working properly and will be maintained in good working order.
b. The insured guarantees that a guard dog ensures the protection of the premises and that this form of protection will be maintained.
c. The insured warrants that an anti-theft system with surveillance cameras is and will continue to be in service at all times.
d. The insured has never suffered a loss.
d. The insured has never suffered a loss.
Who is not considered an adjuster?
a. An adjuster acting on behalf of the policyholder
b. An external adjuster who works directly for the insurance company
c. A person who acts only as a dispatcher in the event of maritime disasters
d. An independent adjuster hired by the insurer to handle a particular claim
c. A person who acts only as a dispatcher in the event of maritime disasters
What statutory requirement applies to insurance contracts?
a. Surety
b. Oral evidence
c. Utmost good faith
d. Negotiation
c. Utmost good faith
What best describes the legal concept of privity of contract?
a. Limiting the scope of influence of a contract to the parties to the contract
b. The information between the third party and insurer will remain confidential
c. Allowing the assignment of a policy to a party outside of the contract
d. Freedom of the insured to assign the claim payment to anyone
a. Limiting the scope of influence of a contract to the parties to the contract
An insurance claims adjuster representing an insured on a fee basis in a claims settlement.
What is a public adjuster
A claims person involved in any aspect of the claims adjusting process. May work for brokers, agents, or insurers. Can perform any duty in the adjusting process including taking the initial report of a loss, adjusting the loss, or handling the salvage or subrogation aspects of claims.
What is claims handler
An employee of an insurance company who directs the investigations of staff adjusters and independent adjusters, reviews their reports, and approves claim settlements.
What is a Claims examiner
A contract that can be affirmed or rejected at the option of the aggrieved party.
what is voidable contract
An illegal contract. In the law, a contract that was never made or never existed. For example, one cannot enter into a contract to commit an illegal act like theft and have it stand up in court. Such a contract is considered a void contract.
What is a void contract
A statement or conduct made to influence an insurer to decide on a risk. The decision includes declining or accepting the risk and deciding the rate and premium to be charged. In insurance, these statements are said to be “material to the risk” and are enough to void a policy ab initio (Latin term meaning “from the beginning”).
what is representation
A contract of insurance is based on utmost good faith. An applicant for insurance is required to disclose to the company all material facts that are necessary to underwrite a policy. If the applicant does not disclose all these facts, the applicant is guilty of non-disclosure and may risk having coverage voided from inception.
What is non-disclosure