Chapter 2 Flashcards
Each of the following must be present in order for insurance contract to be legal and enforceable Except:
Competent Underwriting
Delivery of an insurance contract is an illustration of
Acceptance
An insurance contract is created by an insurer. Any ambiguities that appear in the future will be decided by a court in favor of the insured since the policy is
Contract Adhesion
The statement made by applicant are considered to be
Representations
A statement made by an applicant for insurance that is guaranteed to be absolutely true and is made part of the contract is called
Warranty
Which of the following is considered to be voluntary relinquishment of a known right
Waiver
Deliberate or intentional deceit by making false statements is known as
Fraud
Each of the following is characteristic of an insurance contract Except:
Bilateral
A statement made by an applicant for insurance that is made part of the contract and upon which coverage is conditioned is known as
An individual under duress
Nether party can be under duress or any undue influence
genuine assent
Several elements must present in order for a insurance contract to be enforceable. One required element is that all parties be competent. Each of the following is competent to enter a contract except
An individual under duress
Which of the following best describes when a insurer fails to enforce a provision in a insurance policy ?
Waiver
An applicant for insurance submits, through a producer , a completed application and the initial premium. Once it is received by the insurance company underwriter, the risk is assessed and the insurer makes a counter offer. Which of the following has occurred?
The original offer has been rejected by the insurer.
Which of the following is the binding force in a insurance contract.
Consideration
Which of the following best describes a contract that is characterized by a premium paid for coverage with no guarantee of a benefit being paid in the future?
Aleatory
When one party makes a proposal for insurance what has occurred?
Offer
Is legal principal involving a broken promise. It prohibits an insurer from denying a claim due to specific actions by the insurer or its representatives or due to inaction by the insurer..
Estoppel
If the insure mistakenly accepts an incomplete application and issues a policy can they deny a claim?
No- the insured is protected by waiver
failure to disclose material facts
Concealment
One party may recover more in value then he or she has parted with based upon a possible future event
Aleatory
Both parties must deal with one another in accordance with standards of honesty and sincerity. These parties rely on statements of another.
utmost good faith
Must satisfy certain aspects before the contract can be executed
Conditional
If a applicant incorrectly states his residence address on application
False Statement ( Misrepresentations)
The policy owner/ Insured is made financially whole after a loss is paid
indemnity
Contract type Is drafted by the insurer and accepted by the applicant. ( One sided contract Unilateral)
Adhesion
Arising in a contract of adhesion involve legal interpretations affecting contracts.
Ambiguities or Confusing language
Information had it been known by the insurer at the time of the application would have cause the insurer to reject the application
Material Misrepresentation
A promise in exchange for an act already performed or an act an exchange for a promise
Unilateral (one sided)
People not allowed to enter into a contract
Minors, Insane or mentally incompetent, individual under the influence, person forced, enemy aliens and convicts
