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P&C ProvisiContract
P&C Provisions & Contract Law Flash Cards
| Question | Answer |
|---|---|
| What provision defines how a policy will respond if there is more than one insurance policy written on the same risk? | Other insurance |
| What is a binder? | A temporary insurance contract that goes in effect prior to the policy issue |
| What is consideration on the part of the insurer? | A promise to pay in the event of a loss |
| Information about changes to the policy or return of premium can be found in what section of a policy? | Conditions |
| What process is used to settle a casualty claim when the insured and the insurer cannot agree? | Arbitration |
| What insurance principle does pro rata liability protect? | Indemnity |
| What is a warranty in an insurance contract? | An absolutely true statement upon which the validity of the policy depends |
| What are the four elements of an insurance contract? | Agreement (offer and acceptance), consideration, competent parties, and legal purpose |
| In commercial property policies, who has control of the policy, and who can cancel it? | First named insured |
| What does the term unilateral contract mean? | A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise. |
| Where is the policy period stated in an insurance policy? | On the declarations page |
| What part of an insurance policy indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy? | Conditions |
| Which method of loss valuation is contrary to the principle of indemnity? | Replacement cost |
| When does pro rata liability apply? | When an insured has more than one policy covering a loss |
| Persons who are not named on the declaration page of a policy but who are protected by the policy are known as what type of insured? | Additional insured |
| In property and casualty policies, what is required for an assignment to be valid? | A written consent of the insurer |
| When is an appraisal needed and how can it be requested? | If an insured and an insurer disagree about the value of a property loss, either party can make a written demand for an appraisal. |
| What is proof of loss? | A sworn statement from an insured notifying the insurer about a loss |
| What section personalizes an insurance policy? | Declarations |
| What are an insured’s duties after loss? | Protect the damaged property from further damage, prepare an inventory of damaged property, cooperate with the insurer in settling a loss, notify police in case of theft; and submit proof of loss |
| What is consideration in an insurance contract? | Consideration is something of value that each party gives to the other. Consideration on the part of the insurer is binding. |
| What is additional coverage in an insurance policy? | A provision that adds more coverage for a specific loss at no additional premium |
| What is the difference between cancellation and nonrenewal? | Cancellation is the termination of an insurance policy by either party prior to the policy’s expiration date. Nonrenewal is the termination of a policy at its expiration date by not offering a continuation of the existing policy. |
| In insurance contracts, when does acceptance usually occur? | When the insurer approves a prepaid application |
| What part of a policy shows the amount of insurance, premium, and policy terms? | Declarations |
| In insurance contracts, when is the offer usually made? | When the insurance application is submitted |
| What does an endorsement do to an insurance contract? | It modifies the policy’s original terms. |
| What part of an insurance policy contains the insurer’s promise to pay a claim? | Insuring agreement |
| What does the exclusions section of a policy specify? | What perils are not insured against, or what persons are not covered in a policy |
| Who is an insured in property and casualty insurance? | Anyone covered under the policy, even if not specifically named |
Created by:
Chase1life
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