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UNIT 2
UNIT 2 QUIZ
| Question | Answer |
|---|---|
| In legal terms, voluntary relinquishment of a known right is called a | Waiver |
| Joan & Steven have applied for automotive insurance with ABC Auto Insurers. The ABC agent asked Joan & Steven if their resident 18 yr old son. Henry, has had any moving traffic violations in the past 2 yr. Both answer no. The fact is that Henry had 4 speeding tickets, but never told his parents. What legal concept does this scenario describes? | Representation |
| Statements made on an application that are guaranteed to be true are | Warranties |
| An insurance company issued a homeowners policy that included ambiguous language regarding how a loss was settled. The insured sued the insurance company and won. The judge stated that due to the ambiguous language in the contract, the decision must be made in favor of the insured. The judge was basing this decision on which of the following types of insurance contract? | Contract of Adhesion |
| Which one of the following is NOT an element of a valid contract? | Intent |
| In insurance, a waiver is best considered as | The Voluntary Surrender of a Known Right |
| Joan/Steven have applied for automobile ins with ABC Auto Ins When the agent asks if anyone else drives the car, they lie & do not tell him that their neighbor George who lost his drivers License due to drunk driving, uses one of their cars on a regular basis to drive to work. Once the Co. found out about George after he had an accident, they denied the claim, citing what legal concept as the reason? | Fraud |
| Joan & Steven have applied for automobile insurance with ABC Auto Insurers. The ABC agent asked Joan & Steven if their resident 18 yr old son, Henry, has had any moving traffic violation in the past 2 yrs. Both answer No. The fact is that Henry had 4 speeding tickets, but never told his parents. Once the company found out about Henry's record, they declined the application citing misrepresentation as the reason. Did Joan/Steve misrepresent Henry's driving record? | YES. Though not fraudulent, the misstatement was material |
| Twisting is a form of? | Misrepresentation |
| Bryce owns a $50,000 lake cabin that he has insured for $40,000. He sustains a $5,000 covered loss. According to the principle of indemnity, how much will his insurer pay? | $5,000 |
| Ralph asks his insurance agent to explain how the homeowners policy covers stolen jewelry. The agent spends some time explaining how, when, and what jewelry theft coverage exists in the policy. As a result, Ralph believes that his $5,000 watch is covered in full under the basic policy. After the watch is stolen, Ralph is surprised to learn that he has only limited coverage. What legal doctrine might Ralph rely upon to get full coverage for his loss? | Estoppel |
| Knowingly lying on an application to obtain coverage would be an example of | Fraud |
| Warranty is a statement made by the applicant regarding the risk to be insured. Which of the following statement is NOT true about warranties? | A Warranty Must Refer To a Material Fact. |
| Jennifer/David signed a homeowners insurance application for coverage on their home. They did not divulge that last year their garage burned down after their 16 year old son left a cigarette burning. The agent sent in the application and a policy was issued. When another fire occurred 2 months after the policy was issued, the company voided the policy because the agent would not have sent in the application if he had known of the prior loss. Which contract principle does this situation describe? | Utmost Good Faith |
| Which of the following terms describes an insured's oral or written statement that becomes part of an insurance contract and can void a policy if they are breached? | Warranty |
| Joan and Steven have applied for automobile insurance with ABC Auto Insurers. They were NOT asked and did NOT tell the agent that their neighbor, George, who lost his driver's license due to drunk driving. Uses one of their cars on a regular basis to drive to work. Once the company found out about George after he had an accident, they denied the claim, citing what legal concept as the reason? | Concealment |
| Which one of the following terms indicates that an insurance contract contains the enforceable promises of only one part? | Unilateral |
| The principle that restores someone to the condition he enjoyed before a loss is | Indemnity |
| Which of the following describes a personal contract? | The contract protects the individual who owns the property. |
| The attempt to restore the policy-holder to the same financial condition enjoyed before a loss is called? | Indemnification |
Created by:
Pandagirl75