Characteristics of Insurance Contracts

Question 1

There are __ characteristics of an insurance contract which are special and not found in other contracts.

Answer 1

6

Question 2

List the 6 characteristics of an insurance contract:

Answer 2

1. Personal
2. Adhesion
3. Utmost good faith
4. Aleatory
5. Unilateral
6. Conditional

Question 3

A personal contract protects the __________________ from financial losses. Coverage follows the person, not the property.

Answer 3

Policyholder

Question 4

Insurance is a contract of ______________.

Answer 4

Adhesion

Question 5

In a contract of adhesion, the insurer is responsible for the _________ of the contract.

Answer 5

Terms

Question 6

T or F
The insured has no say int the wording of the insurance contract.

Answer 6

True

Question 7

Courts favor the ____________ in the event of an ambiguity.

Answer 7

Insured

Question 8

Utmost Good Faith- applicants are expected to be completely __________ about the risk to the insurer. Insurer must rely on applicants not to conceal or misrepresent pertinent facts.

Answer 8

Honest

Question 9

Insurance contracts or ________________, or depending on an unknown future event.

Answer 9

Aleatory

Question 10

Insurance contracts are __________________ meaning that ONLY the insurer has an obligation to pay for covered losses. Insured has no obligation (can stop paying premiums at any time.)

Answer 10

Unilateral- affects only one side