Exam 51: A: Insurance

Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie,an agent who works for Neighbors.In this transaction,Obie is

Doctors Medical Associates obtains an insurance policy that protects its members against negligence claims by their pa?tients.This is

Donald applies for a life insurance policy with Equity Insurance Company through Fletch,an agent who works for Equity.Donald pays the initial premium.Fletch writes a binder,which

A broker is an agent of the insurance company.

Erte applies for,and obtains,casualty insurance coverage from Friendly Insurance Company for his business,Golf Club,Inc.The effective date of the policy is the date

Felicity Cookware Company makes and sells kitchen products.To cover injuries to consumers if the products prove de?fective,Felicity should obtain

An incorrect statement as to the age of the insured provides an insurance company with an excuse to avoid payment on the insured's death.

Beth obtains a life insurance policy from Consumers Insurance Company,naming her spouse Don as the beneficiary.Beth and Don are di?vorced.There is no provision in the policy about divorce.On Beth's death,Consumers must

An incontestability clause prohibits an insured from entering a contest during the term of a policy.

Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC).IIC may cancel,or refuse to renew,the policy because of

Credit insurance pays to a debtor the balance of a debt on his or her disability,death,insolvency,or bankruptcy.

An insurer has a duty to avoid paying a claim even if it means acting in bad faith.

A pro rata clause in a fire insurance policy requires that any loss be shared proportionately by all insurers covering the same risk.

Misstatements or misrepresentations in an application for insurance can void a policy.

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.

Cathy obtains from Depend Insurance Company a policy that pro?vides if a dispute arises between the parties concerning the settle?ment of a claim,the dispute must be submitted to an impartial third party,not a court,for resolution.This is

Mila,who captains a commercial fishing boat,obtains a policy from North Coast Insurance Company,which agrees to pay $500,000 to Mila's beneficiary on Mila's death.This is

Reno is the beneficiary of a life insurance policy on Sula's life obtained from Thicket Insurance Company.The insured of this policy is

Patty,who is divorced,owns a house.She has no reasonable expectation of benefit from the life of Quinn,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,Quinn dies and the house is destroyed in a fire.Can Patty obtain payment on either the death of Quinn or the loss of the house? Explain.

Computer Electronics Corporation (CEC)discovers a defect in its newly developed,recently marketed hard drives.CEC decides to recall the prod?uct and replace it with another.CEC's in?surance policy with Delta Business Insurance Company will cover any harm to customers that oc?curs before the drives are returned.Is it likely that the policy will also pay for the recall and replacement? If so,what type of policy does CEC have?