Exam 19: Insurance

Lane mails a $600 check for his $50,000 home policy with Surround Insurance Co. two months late. Surround cashes the check. Two weeks later, the house is destroyed by fire. When Lane attempts to collect the $50,000 in policy proceeds, Surround asserts that the policy had lapsed and offers to refund the $600 payment. Discuss the legal rights and obligations of Lane and Surround Insurance Co.

Joe had made an agreement with Auto Insurance Co. not to use his van for commercial business purposes when he purchased auto insurance. Joe had an accident while delivering pizzas for Bigger Pizza, Inc. For which type of violation will Joe not be covered under his insurance?

____________ coverage permits a driver to buy optional coverage, such as personal injury insurance, that would allow him or her to receive payment without bothering to determine fault.

What type of insurance policy requires the payment of premiums throughout the life of the insured and pays the beneficiary the face value of the policy upon the insured's death?

While Leah and Grant were lawfully married, Leah had purchased a $500,000 life insurance policy on Grant's life, naming herself as the beneficiary. Subsequently they got divorced and Grant died a year later. Grant leaves two surviving children, Tom and Cindy. Who is likely to receive the proceeds of the $500,000 life insurance policy?

If an insured purchases a guaranteed insurability provision on a life insurance policy, the:

An individual takes out a typical life insurance and commits suicide three years later. The beneficiary may collect the insurance.

A(n) ____________ will provide temporary insurance coverage until the policy is formally accepted.

To avoid risk while waiting for an insurance policy to be formally accepted, an insured may choose to have the insurer issue a binder to provide interim coverage.

Bill has a $500,000 life insurance policy naming his minor children as beneficiaries. Bill is shot and killed while breaking into his neighbor's home. Will Bill's children likely be able to collect the life insurance proceeds?

Insurance companies have the right to step into the shoes of the party they compensate and sue any party whom the compensated party could have sued.

Peter lost control of his car and drove it though his neighbor Clyde's fence. If Clyde were to bring a claim against Peter for the damage to the fence, what type of insurance would Peter need to cover the damage?

The ____________ accepts the risk of loss in return for a premium.

Property insurance can be made less expensive by the use of a deductible.

In most states, an innocent misrepresentation by the insured would make the policy:

An uninsured motorist drove through a red light and hit the passenger side of David's car. David, the driver, suffered a concussion, and the passenger, Jayne, broke her right arm and leg. David's car sustained extensive damages that would cost $2,000 to repair. If David has uninsured-motorist insurance, the coverage will:

At 18, Jackson purchased a straight life insurance policy with a face value of $20,000. At a later time, he borrows a loan value against the cash surrender value of the policy. However, Jackson dies unexpectedly while the loan is still outstanding. Discuss the case.

Sagan forgets to list in his health insurance application that he broke his arm at age five. He is not guilty of fraudulent concealment.

Under bodily injury liability automobile insurance, the insurer is liable for damages up to the limit of the insurance purchased.

David's house suffers $5,000 of water damage due to the fire department fighting a fire at his house. David may recover for this loss under his fire insurance policy.