Exam 51: Insurance Law

[Information Issues] Nari bought a sporty, yellow convertible. She had a teenage son at home, Joon, but she did not plan to let him drive the new car because he had driven her last car into the lake. Embarrassed, Nari decided to change insurers. She went to Big Insurance Company to apply. She got an application from Mark, an agent. Nari was a little nervous because the application asked about other drivers in the home. It also asked if there were any teenagers in the home. Nari decided to answer "no" on both counts because she had no plans to let Joon drive. Nari got full coverage on the car, and the policy was issued shortly after she completed the application. One year later, she renewed the policy without revising any of the information she provided. One month after she renewed the policy, Nari really needed some gas in the car for the next day, but she was unable to go to the gas station. Under the belief that he had sufficiently matured, Nari sent Joon to get gas. Unfortunately, a driver who had no insurance hit the car and totaled it. (Luckily, Joon was okay.) Nari immediately called her agent, Mark. When Mark reviewed the police report, however, he told Nari that there would be no coverage on the car because Joon was driving. Nari said that was completely unfair and that she would take her case to court to be decided by a jury. Nari told Mark that Big Insurance Co. issued the policy and that she was relying on the incontestability clause. Mark told Nari that she was wrong and that based on how disputes were handled under the policy, she would not even see a jury. -Which of the following, if any, will Big Insurance Co. most likely be required to prove in order to deny coverage based on the discrepancy between the application and Joon's driving?

If the insured misrepresented his or her age on the insurance application, what is the result when the insured dies and his or her beneficiary seeks payment?

An insurer, sometimes called a(n) ________, receives payments from the insured party.

Bowman's Hunting Store has 34 employees and pays for each employee's workers' compensation insurance as a benefit. This type of insurance is known as:

If an insurance company wants to cancel a policy, it must provide the insured with a grace period, but it does not have to provide advanced notice.

The government spends large amounts on social insurance.

[Information Issues] Nari bought a sporty, yellow convertible. She had a teenage son at home, Joon, but she did not plan to let him drive the new car because he had driven her last car into the lake. Embarrassed, Nari decided to change insurers. She went to Big Insurance Company to apply. She got an application from Mark, an agent. Nari was a little nervous because the application asked about other drivers in the home. It also asked if there were any teenagers in the home. Nari decided to answer "no" on both counts because she had no plans to let Joon drive. Nari got full coverage on the car, and the policy was issued shortly after she completed the application. One year later, she renewed the policy without revising any of the information she provided. One month after she renewed the policy, Nari really needed some gas in the car for the next day, but she was unable to go to the gas station. Under the belief that he had sufficiently matured, Nari sent Joon to get gas. Unfortunately, a driver who had no insurance hit the car and totaled it. (Luckily, Joon was okay.) Nari immediately called her agent, Mark. When Mark reviewed the police report, however, he told Nari that there would be no coverage on the car because Joon was driving. Nari said that was completely unfair and that she would take her case to court to be decided by a jury. Nari told Mark that Big Insurance Co. issued the policy and that she was relying on the incontestability clause. Mark told Nari that she was wrong and that based on how disputes were handled under the policy, she would not even see a jury. -Regarding Nari's reliance on an incontestability clause if typical state laws are in effect, which of the following is most likely true?

Homeowner's insurance is an example of which of the following types of insurance?

________ insurance protects a garage owner from liability to persons who are injured by the operation of the garage.

A(an) ________ clause can help swiftly settle disputes between the parties.

Which of the following types of insurance protects members of specific professions from liability associated with their professional acts?

An individual has an insurable interest in property whenever that person derives a(n) ________

Arbitration clauses are illegal in policies of insurance, as a matter of federal law.

What type of insurance policies cover attacks by hackers, software coding, and human errors?

Premiums for whole-life insurance are generally smaller than those for term-life insurance.

How does an insurance company's risk management work in terms of distribution?

Which of the following is a state mandated clause that ensures that after an insurance policy has existed for a period of time, the company cannot contest any statements in the application?

If an insured person is caught up on payments, there is no defense to nonpayment of a claim by an insurance company.

Excluding injuries to employees, ________ protects contractors against liability for injuries while completing a job.

[Imari's Imprudence] Imari was texting while driving and slammed into the back of Cody's car. Shortly thereafter she received notice of a lawsuit setting forth Cody's claims for personal injury and property damage. Imari was very busy studying for college and did not feel like dealing with a pesky lawsuit. Several months later, Beatriz, a new agent with the insurer, called Imari and told Imari that she had just heard something about a lawsuit from the Cody's lawyer. Beatriz told Imari that although investigation would be difficult after so many months, she would like to talk with Imari because the trial was scheduled for next week. Imari told Beatriz that she had no time to meet at the moment and that just before court, she would meet with the lawyer the company appointed to represent her. Beatriz told Imari that the insurance company was going to deny coverage. Beatriz also told Imari that vehicle insurance did not typically provide for legal representation and that, in any event, no lawyer would be provided. Finally, Beatriz told Imari that Imari's insurance was cancelled immediately because she was a real jerk and failed to help, that insurance would not pay for accidents that were the fault of Imari anyway, and that the insurer wanted nothing more to do with her. -Regarding Beatriz's assertion that vehicle insurance policies do not generally provide coverage for legal representation, which of the following is true?