Exam 51: A: Insurance

An insurable interest in property must exist when a policy is purchased.

Shelley obtains a life insurance policy with no cash surrender value or cash value,and names her son Thad as the beneficiary.This is

Isabel obtains a fire insurance policy on her home from Justice Insurance Company.The home is lost in a fire,but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy.A court would most likely

Fred misstates his age in applying for a life insurance policy with Gamma Insurance Company.Due to this "error," Gamma can

A business firm may have an insurable interest in the life of any of its employees,except a key employee.

An insurance company may cancel an insured's policy if the insured ap?pears as a witness in a case against the company.

Kelsy obtains a business liability insurance policy from Luminous Insurance Company for Kelsy's Framing & Art Supplies store.When an event occurs that gives rise to a claim,each party has a duty to

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

Insurance coverage is never effective until a formal written policy is issued.

Feta is a partner in the game design firm GR8 Games,Inc. ,which ob?tains key-person life in?surance on Feta in the amount of $1 million from Halo Insurance Company.Feta quits GR8 Games to join Icy Applications,Inc.Feta dies.Under the principle of insurable interest,Halo must pay the $1 million to

Regular Business,Inc.(RBI),obtains a fire insurance policy from Statistical Insurance Company on a $400,000 warehouse.The policy includes an 80-percent coinsurance clause.RBI insures the property for $320,000.In a fire,the warehouse suffers $200,000 in damage.RBI can recover

A fire insurance policy is assignable without the insurer's consent because the policy "runs" with the insured property.

If a provision in an insurance policy is ambiguous,the provision will be interpreted against the insurance company.

Insurance is classified according to the amount of the payment on a claim.

Trustworthy Insurance,Inc. ,has a valid reason to cancel a policy issued to USA Sales Company.In most states,Trustworthy could cancel the policy on

A person can insure anything in which he or she has an insurable interest.

Under a life insurance policy,in the absence of contractual exclusion,any cause of death is one of the insurer's risks.

Infinite Sales Corporation obtains an insurance policy that protects Infinite Sales in the event of the death or disability of Jacqueline,Infinite's executive sales manager.This is

The words used in an insurance contract are given special meaning.

In defense against payment,an insurance company can raise any of the de?fenses that would be valid in an ordinary action on a contract.