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OTL Insurance > Study 6 > Flashcards

Study 6 Flashcards

1
Q

A ______ is an agreement enforceable at law

A

Contract

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2
Q

Under common law, the following conditions must exist or the contract is void

A 
Genuine Internet
Legal Capacity
Legality of purpose
Agreement
Consideration
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3
Q

To be legally effective, consideration must contemplate the following three things

A
  1. It must have a price
  2. It must have some value
  3. It must be in the present or future
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4
Q

The following persons have limited ability to contract legally

A
  1. Infants or minors
  2. Insane or mentally incompetent
  3. Intoxicated persons
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5
Q

For a contract to be enforceable it must be a lawful purpose. It is unenforceable and void if it is any of the following:

A
  1. Forbidden by law
  2. Against public policy
  3. For the purpose of commutating a crime
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6
Q

when more then one policy has been issued to insure a given risk, a loss must be divided equitably among the various policies. According to their amount and terms, each “Contributes” its share of the loss

A

Contribution

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7
Q

Contribution Calculation =

A

Amount of coverage / Total combined coverage X amount of loss = ratable portion

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8
Q

Insurance that does not participate until all other similar insurance on the same subject is exhausted, or until loss exceeds the previously agreed upon amount

A

Excess Insurance

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9
Q

A fact that would affect a contract of insurance enough to influence an insurers decision

A

Material Fact

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10
Q

A material fact if known would affect insurers when deciding the folloing

A

the acceptability of risk, the amount of premium to be charged and the conditions applicable to accepting the risk

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11
Q

an incorrect statement made about a material fact. It can also be an omission of certain facts

A

Misrepresentation

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12
Q

what are three types of misrepresentation

A
  1. Innocent - an oversight
  2. Fraudulent - an outright lie intended to mislead or hide
  3. One of extreme carelessness - statement made with no regard to weather is be true or false
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13
Q

Silence when there is an obligation to speak is known as

A

Non-Disclosure (Concealment)

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14
Q

With holding information pertinent to the risks

A

Non-Disclosure (Concealment)

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15
Q

What are the two time periods to disclose Material Facts

A
  1. Facts as they exist up to the time the contract is formed
  2. New facts that arise
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16
Q

What is needed for an offer to become and agreement “Meeting of the Minds”

A

acceptance of the offer

17
Q

A contract that was never made and never existed

A

Void Contract

18
Q

Three Requirements of a Insurance Contract

A

Insurable Interest
Indemnity
Utmost Good Faith

19
Q

“No more and No less”

A

Indemnity

20
Q

Policy wording that does not conform to the standard wording in general use within the insurance industry and that is unique to the policy involved

A

Manuscript Wording

21
Q

A short term certificate issued at the renewal

A

Renewal Certificate

22
Q

A ___________ will overrule any wording in the policy itself that is inconsistent with the endorsement, unless an express stipulation to the contrary is included

A

Endorsement

23
Q

What could the affects of misrepresentation lead to

A

Void contract

24
Q

A policy covering a risk that is divided among a number of insurers; the policy is issued by the “Lead” company and signed by all participating companies

A

Subscription Policy

25
Q

A temporary confirmation that coverage is in effect given to the insured - which can be oral or written

A

Binder

26
Q

True or false the premium is shown on Binders

A

False

27
Q

A temporary confirmation that coverage is in effect given to the insurer

A

Cover Note

28
Q

True or false the premium is not shown on Cover Notes

A

True

29
Q

Five main sections of a policy

A 
Coverage Summary
Insuring Agreements
Statutory Conditions (QC General Conditions)
Policy Conditions
Signature Clause
30
Q

This section of the policy sometimes referred to as declarations , contains the parties of the contract (insured and insurer), The commencement date, Term, Expiry date, The premium and rate, and the amounts insured

A

Coverage Summary

31
Q

This section of the policy states the following: the subject matter of the insurance - Description of property covered. The perils covered against. the exclusions and the circumstances under which the insured may receive the proceeds of the insurance

A

Insuring Agreements

32
Q

This clause states that the policy is to be signed by the insurer only and is one of the sections of the policy

A

Signature Clause

33
Q

Insurer cancellation of policy - cancellation of policy with the return premium credit being the full proportion of premium for the unexpired term of the policy

A

Pro rata Cancellation

34
Q

Insured Cancellation of policy - cancellation of policy before its natural expiration, the insurer pays a return premium less the penalty

A

Short rate Cancellation

OTL Insurance (17 decks)

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