Question 1

Under which of the following circumstances would an insurer pay the beneficiary in the event of the insured's death?

Accepted Answer

A) War 
B) Execution 
C) Accidental 
D) Suicide 
E) Life insurance policies cover all causes of death. 
A) War 
B) Execution 
C) Accidental 
D) Suicide 
E) Life insurance policies cover all causes of death. C

Question 2

Which one of the following is not an example of a type of liability insurance?

Accepted Answer

A) Product liability 
B) Contractors' 
C) Garage 
D) Weather 
E) Professional 
A) Product liability 
B) Contractors' 
C) Garage 
D) Weather 
E) Professional D

Question 3

Regarding Beatriz's assertion that vehicle insurance policies do not generally provide coverage for legal representation,which of the following is true?

Accepted Answer

A) Beatriz is incorrect. 
B) Beatriz is correct only in situations in which a student with a student policy is involved in an accident. 
C) Beatriz is correct only in situations in which an insured has had at least two previous accidents. 
D) Beatriz is correct because insureds are expected to shoulder some of the burden of accidents. 
E) Beatriz is correct only in situations in which a student is carried on a parent's insurance policy. 
A) Beatriz is incorrect. 
B) Beatriz is correct only in situations in which a student with a student policy is involved in an accident. 
C) Beatriz is correct only in situations in which an insured has had at least two previous accidents. 
D) Beatriz is correct because insureds are expected to shoulder some of the burden of accidents. 
E) Beatriz is correct only in situations in which a student is carried on a parent's insurance policy. A

Question 4

________ is a term used to define the payment made by an insured party in exchange for a later payment by an insurer in the event of damage or injury to insured property or person.

Accepted Answer

A) Assessment 
B) Bill 
C) Requirement 
D) Premium 
E) Tag 
A) Assessment 
B) Bill 
C) Requirement 
D) Premium 
E) Tag

Question 5

A policy of title insurance is an example of which of the following types of insurance?

Accepted Answer

A) Profit loss 
B) Business loss 
C) Economic 
D) Commercial 
E) Economy 
A) Profit loss 
B) Business loss 
C) Economic 
D) Commercial 
E) Economy

Question 6

[Insurance Incident] Ace Photo,a company specializing in wild animal photography,took out a life insurance policy through ABC Insurance on its president,Ringo,and an insurance policy on the company-owned jeep that he drove.Some time later,Ringo got a better offer from Flash Company,another company specializing in the photography of wild animals,and went to work for them.He parted on good terms with Ace Photo,and took the jeep under the mistaken idea that it was part of his severance benefits.Neither of the insurance policies was cancelled by Ace Photo.Unfortunately,while photographing a lion for Flash Company,Ringo was attacked and eaten.His jeep was then stolen by a bystander.Ace Photo had been in the process of contacting Ringo in an attempt to obtain possession of the jeep but had not reacquired it at the time of his death.Ace Photo had renewed the policy on the jeep,reaffirming to the insurer that its purpose was for use by Ace Photo employees because Ace Photo planned to have possession of the vehicle shortly.Ace Photo filed a claim to collect on the life insurance policy and also on the vehicle policy.ABC Insurance denied both claims.
-Which statement is true regarding the contention of ABC Insurance that it is not required to pay to Ace Photo the amount for which Ringo's life was insured?

Accepted Answer

A) ABC Insurance Company is incorrect because Ace Photo had an economic interest in Ringo based on his possession of the jeep that Ace Photo still owned. 
B) ABC Insurance Company is incorrect only if Ace Photo owed Ringo retirement or some other sort of benefit. 
C) ABC Insurance Company is correct because Ace Photo no longer had an economic interest in Ringo's life. 
D) ABC Insurance Company is incorrect because Ace Photo held an economic interest in Ringo's life at the time the insurance was purchased. 
E) ABC Insurance Company is correct only if Ringo's new employer had purchased life insurance on his life. 
A) ABC Insurance Company is incorrect because Ace Photo had an economic interest in Ringo based on his possession of the jeep that Ace Photo still owned. 
B) ABC Insurance Company is incorrect only if Ace Photo owed Ringo retirement or some other sort of benefit. 
C) ABC Insurance Company is correct because Ace Photo no longer had an economic interest in Ringo's life. 
D) ABC Insurance Company is incorrect because Ace Photo held an economic interest in Ringo's life at the time the insurance was purchased. 
E) ABC Insurance Company is correct only if Ringo's new employer had purchased life insurance on his life.

Question 7

Which of the following was the result on appeal in Equity Fire & Casualty Company v.Laurence Traver,the case in the text in which an insured on a policy of automobile insurance mailed a premium to the insurer,but it did not reach the insurer prior to the expiration date of the policy;and the insurer refused to provide coverage for a motor vehicle accident that occurred after the expiration date of the policy and before the premium was received?

Accepted Answer

A) The court ruled that under the unique facts of the case,there was acceptance of the renewal offer preventing a lapse of the policy. 
B) The court ruled that coverage was not required under the policy because the insured did not meet his obligation of seeing that the premium amount was received by the insurer in a timely manner. 
C) The court ruled that coverage was required under the policy because of the mailbox rule. 
D) The court ruled that coverage was required because the insured had a grace period of 7 days in order for the payment to arrive. 
E) The court ruled that coverage was not required under the policy because of the mailbox rule. 
A) The court ruled that under the unique facts of the case,there was acceptance of the renewal offer preventing a lapse of the policy. 
B) The court ruled that coverage was not required under the policy because the insured did not meet his obligation of seeing that the premium amount was received by the insurer in a timely manner. 
C) The court ruled that coverage was required under the policy because of the mailbox rule. 
D) The court ruled that coverage was required because the insured had a grace period of 7 days in order for the payment to arrive. 
E) The court ruled that coverage was not required under the policy because of the mailbox rule.

Question 8

A workers' compensation insurance policy is an example of which of the following types of insurance?

Accepted Answer

A) Injury 
B) Business 
C) Casualty 
D) Loss 
E) Economi c 
A) Injury 
B) Business 
C) Casualty 
D) Loss 
E) Economi c

Question 9

The parties express their agreement for insurance in a document called a[n] ________.

Accepted Answer

A) Policy 
B) Catalog 
C) Notification 
D) Brochure 
E) Application 
A) Policy 
B) Catalog 
C) Notification 
D) Brochure 
E) Application

Question 10

The insured and insurer both have obligations under an insurance contract,if either fails to meet their obligation,the other can usually sue for breach of contract.

Accepted Answer

A) True 
 B)False

Question 11

If insurance covers some type of business risk,the insurance is called ________ insurance.

Accepted Answer

A) Commercial 
B) Economic 
C) Business loss 
D) Economy 
E) Profit loss 
A) Commercial 
B) Economic 
C) Business loss 
D) Economy 
E) Profit loss

Question 12

In insurance law,the insured party is the party who makes a payment to an insurance company,called a premium,in return for insurance coverage.

Accepted Answer

A) True 
 B)False

Question 13

Insurance is defined as a contract in which the insured party makes payments to the insurer in exchange for the insurer's promise to make payment or transfer goods to another party in the event of injury or destruction to the insured party's property or life.

Accepted Answer

A) True 
 B)False

Question 14

What type of insurance is purchased by neither the insured party nor the insurer?

Accepted Answer

A) Individual 
B) Casualty 
C) Group 
D) Personal 
E) Commercial 
A) Individual 
B) Casualty 
C) Group 
D) Personal 
E) Commercial

Question 15

A[n] ________ is a term identifying the person who receives insurance proceeds in the event of injury or damage.

Accepted Answer

A) Identified 
B) Beneficiary 
C) Obtainer 
D) Insured 
E) Receiver 
A) Identified 
B) Beneficiary 
C) Obtainer 
D) Insured 
E) Receiver

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

If the insured or insurer fails to meet an obligation under the insurance contract,what cause of action might the other party have?

Accepted Answer

A) Breach of duty 
B) Breach of good faith and fair dealing 
C) Breach of warranty 
D) Breach of contract 
E) Breach of implied warranty 
A) Breach of duty 
B) Breach of good faith and fair dealing 
C) Breach of warranty 
D) Breach of contract 
E) Breach of implied warranty

Question 18

A policy of fidelity insurance is an example of which of the following types of insurance?

Accepted Answer

A) Profit loss 
B) Business loss 
C) Economy 
D) Commercial 
E) Economic 
A) Profit loss 
B) Business loss 
C) Economy 
D) Commercial 
E) Economic

Question 19

An insurance policy that covers an individual's life or health is ________ insurance.

Accepted Answer

A) Unitary 
B) Personal 
C) Protection 
D) Individual 
E) Family 
A) Unitary 
B) Personal 
C) Protection 
D) Individual 
E) Family

Question 20

Daria's property is damaged in a fire.She claims the property damage amounted to $10,000,and the insurer claims it only amounted to $5,000.Which of the following is true in this situation?

Accepted Answer

A) Daria has no alternative because she must accept the insurer's valuation. 
B) Daria should file for a field evaluation. 
C) The insurer is required to accept Daria's valuation unless the insurer can establish that the insured failed to act in good faith. 
D) Daria should demand an appraisal under her policy's appraisal clause. 
E) Daria should call the state inspector who investigates and makes rulings in such cases. 
A) Daria has no alternative because she must accept the insurer's valuation. 
B) Daria should file for a field evaluation. 
C) The insurer is required to accept Daria's valuation unless the insurer can establish that the insured failed to act in good faith. 
D) Daria should demand an appraisal under her policy's appraisal clause. 
E) Daria should call the state inspector who investigates and makes rulings in such cases.

Exam 51: Insurance Law

Under which of the following circumstances would an insurer pay the beneficiary in the event of the insured's death?

Which one of the following is not an example of a type of liability insurance?

Regarding Beatriz's assertion that vehicle insurance policies do not generally provide coverage for legal representation,which of the following is true?

________ is a term used to define the payment made by an insured party in exchange for a later payment by an insurer in the event of damage or injury to insured property or person.

A policy of title insurance is an example of which of the following types of insurance?

A workers' compensation insurance policy is an example of which of the following types of insurance?

The parties express their agreement for insurance in a document called a[n] ________.

The insured and insurer both have obligations under an insurance contract,if either fails to meet their obligation,the other can usually sue for breach of contract.

If insurance covers some type of business risk,the insurance is called ________ insurance.

In insurance law,the insured party is the party who makes a payment to an insurance company,called a premium,in return for insurance coverage.

Insurance is defined as a contract in which the insured party makes payments to the insurer in exchange for the insurer's promise to make payment or transfer goods to another party in the event of injury or destruction to the insured party's property or life.

What type of insurance is purchased by neither the insured party nor the insurer?

A[n] ________ is a term identifying the person who receives insurance proceeds in the event of injury or damage.

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.

If the insured or insurer fails to meet an obligation under the insurance contract,what cause of action might the other party have?

A policy of fidelity insurance is an example of which of the following types of insurance?

An insurance policy that covers an individual's life or health is ________ insurance.

Daria's property is damaged in a fire.She claims the property damage amounted to $10,000,and the insurer claims it only amounted to $5,000.Which of the following is true in this situation?

An Introduction to Dynamic Business Law

Business Ethics

The Uslegal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title,risk of Loss,and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, holder in Due Course, and Defenses

Liability, defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, officers, and Shareholders

Corporations: Mergers, consolidations, terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, personal Property, and Bailments

Real Property

Landlord-Tenant Law

Wills and Trusts

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