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- 1. Multiple Choice
A false statement made by an applicant for insurance is an example of a
concealment
breach of warranty.
misrepresentation.
offer and acceptance
- 2. Multiple Choice
The principle of utmost good faith is supported by all of the following legal doctrines EXCEPT
warranty
concealment
representation
subrogation
- 3. Multiple Choice
Which of the following statements about subrogation is true?
It is used primarily for losses paid under life insurance policies.
It allows the insurer to sue its own insured who is negligent.
The insuredʹs right to collect benefits may be forfeited if the insured interferes with the insurerʹs rights after a loss.
The insurer is required to exercise its subrogation rights.
- 4. Multiple Choice
All of the following will support an insurable interest for purposes of purchasing property and
liability insurance EXCEPT
ties of blood and marriage.
potential legal liability.
secured creditors.
a contractual right.
- 5. Multiple Choice
Replacement cost insurance means there is no deduction for depreciation in determining the amount paid for a loss.
TRUE
FALSE
- 6. Multiple Choice
A representation is a statement that is material, false, and relied on by the insurer.
TRUE
FALSE
- 7. Multiple Choice
A warranty is a statement that becomes part of the insurance contract and is guaranteed by the maker to be true in all respects.
TRUE
FALSE
- 8. Multiple Choice
Actual cash value supports the principle of indemnity because it is designed to prevent profiting
from insurance.
TRUE
FALSE
- 9. Multiple Choice
Principle of contribution is used to support the principle of indemnity by preventing an insured from collecting twice, once from the insured and a second time from the negligent party.
TRUE
FALSE
- 10. Multiple Choice
In property and casualty insurance, the ownership of property, potential legal liability, unsecured creditors, and contractual rights can support the insurable interest requirement
TRUE
FALSE
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