Exam 11: Insurance Contracts

Joe has a dispute with his insurance company regarding how much he is entitled to recover on a claim. Joe believes he is entitled to get $8,000 based upon his interpretation of the policy wording. The insurer says the claim is not covered by the policy. Joe sues and a court of law decides that the policy wording is vague and ambiguous, and rules that the loss IS covered. What legal characteristic of insurance resulted in the court's decision?

Which of the following is false concerning concealment?

"Binders" are typically used with:

Describe the purposes of deductibles.

Which part of the insurance contract personalizes the coverage to the individual's exposure?

Property insurance policies are standardized for all the following reasons except:

Explain the principle of indemnity. How does one measure indemnity?

The ________ clause in an insurance policy says that when the insurer indemnifies the insured for a loss, it takes over the insured's right to collect payment from any negligent third party that may have caused the loss.

Shicara owns a jewelry store. In exchange for a discount on her burglary insurance premium, she promises the insurer that her trained guard dog will be on the premises at all times, even when the store is closed. One evening she takes the dog home with her instead of leaving him at the store, and a burglar breaks in and steals everything. The insurance company finds out the dog wasn't in the store when the burglary happened, and denies the claim. WHY does the insurer do this?

Tiffany, who is married to Saul, takes out a $1,000,000 life insurance policy on Saul's life in 2008. Two years later they get divorced and Tiffany immediately remarries. Saul is not required to pay any alimony or child support to Tiffany after the divorce. In 2015, Saul dies. What will Tiffany collect on the life insurance policy, assuming she continued to pay all premiums due following their divorce?

Exclusions are not a basic part of an insurance contract.

The parol evidence rule:

Which of the following is not an exception to the rule that insurance contracts are contracts of indemnity?

The doctrine of proximate cause:

Jasmine phones her agent to obtain auto insurance. The agent binds coverage over the phone, and tells her she will have a $250 collision deductible. When the insurer issues the policy, the underwriter imposes a $1,000 deductible because of Jasmine's poor driving record, then mails her the policy. She does not read it or notice this change until she has an accident six months later. She then demands that the insurer only require a $250 deductible rather than a $1,000 deductible, since she did not approve this change. Which legal principle of insurance contracts would be the insurer's most convincing reason for refusing to honor the $250 deductible?

If an insured has actual cash value coverage, how much would he collect given the following facts? 1) Replacement cost of the building is $200,000, 2) Replacement cost of the loss is $30,000, 3) Estimated total useful life is 30 years, and 4) Building has been in use 15 years.

In most property insurance contracts assignment is:

The principle of utmost good faith:

Evan has his house insured for $200,000. He sells the house to Ann for $225,000. Three days after the sale is complete the house is destroyed by fire. Evan has not canceled his homeowner's insurance policy, so he decides to file a claim for losses caused by the fire. What will most likely happen?

The parol evidence rule says: