Exam 50: Insurance

An insurance company may require an applicant to give the company permission to access the applicant's private medical records and credit ratings, for the purpose of evaluating the risk.

Gwen applies for a homeowners' insurance policy on her house with Home & Life Insurance Company through Ivy, an agent who works for Home & Life. In this transaction, Ivy is

Root & Branch Lumber Company obtains a fire insurance policy from Security Insurance, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Root & Branch insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. Root & Branch can recover

Before a loss has occurred, a fire insurance policy is assignable without the consent of the insurer.

A broker is not an agent of the insurance company or the applicant.

Francesca, who is divorced, owns a house. She has no reasonable expectation of benefit from the life of Gordo, her ex-spouse, but she applies for insur?ance on his life anyway. She also obtains a fire insurance policy on the house, which she later sells. Five years later, Gordo dies and the house is destroyed in a fire. Can Francesca obtain payment on either the death of Gordo or the loss of the house? Explain.

Under a coinsur?ance clause, a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it.

Grid Tool Company makes and sells tools and other hardware supplies. To cover injuries to consumers if the products prove de?fective, Grid Tool should obtain

Comprehensive general liability insurance can encompass as many risks as the insurer agrees to cover.

An insurance company may cancel an insured's policy for any reason and at any time.

Estelle, who owns and operates a commercial dairy farm, obtains a policy from Farm & Ranch Insurance Company, which agrees to pay $500,000 to Gabe, Estelle's son and beneficiary, on her death. This is

A pro rata clause requires that all carriers proportionately share in any loss.

Durant obtains a life insurance policy with no cash surrender value or cash value, and names his daughter Elise as the beneficiary. This is

For property insurance, the insurable interest must exist when a policy is purchased.

A business organization cannot obtain insurance on the life of a person, even on the life of an individual who is important to that organization.

Employer's liability insurance insures an employer against liability for injuries or losses sustained by employees during the course of their employment.

An absolute defense against payment exists if the insurer can show that the insured lacked an insurable interest.

Lamont applies for a health insurance policy with MedInsure, Inc., an insurance company, through Netta, an agent who works for MedInsure. Lamont pays the initial premium. Netta writes a binder, which

Grace applies for a homeowners' insurance policy on her house with Heroic Insurance Company through Ian, a broker. In this transaction, Ian is

The words used in an insurance contract are given their ordinary meanings in light of the nature of the coverage involved.