Question 1

Which of the following was the result in Royal Capital Development LLC v.Maryland Casualty Company,the case in the text involving whether on a policy of insurance covering "direct physical loss of or damage to" a building that allows the insurer the option of paying either "the cost of repairing the building" or "the loss of value," the insurer must also compensate the insured for the diminution in value of the building if the insured elects to repair the building?

Accepted Answer

A)   That the insurer could choose between repairing the building or paying for its loss of value and that once proper repairs were made, the insurer had no obligation to cover any diminution in value.
B)   That unless the insured notified the insurer prior to the beginning of repairs that a claim for diminution in value would be made, the issue was waived because the insurer was entitled to take such a claim into consideration in making its decisions.
C)   That a claim for diminution in value could be made only if the insurer delayed in making repairs such that the insured had an equitable claim for diminution in value.
D)   That when a policy promised to pay the insured's loss, the insured has no claim for diminution in value if repairs are made.
E)   That when a policy promised to pay the insured's loss, the insured had a claim for diminution in value even if repairs were made.F) B) and C)
G) A) and E)

Question 2

Which of the following is true regarding Alice's complaint that Prudence failed to help?

Accepted Answer

A)   Prudence had a duty to cooperate with the insurer.
B)   Prudence's only duty was to show up for court; otherwise she had no duty to assist the insurer.
C)   Prudence's only duty was to show up for a court and for any depositions for which she received a subpoena; otherwise, she had no duty to cooperate with the insurer.
D)   Prudence had a duty to assist the insurer and to provide a share of funds to help the insurer in defending her claim.
E)   Prudence had a duty to cooperate with the insurer only because it appears that the accident was her fault.F) A) and B)
G) None of the above

Question 3

Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good?

Accepted Answer

A)   Contractors' liability
B)   Strict liability
C)   Product liability
D)   Business operations
E)   Consumer protectionF) A) and D)
G) A) and B)

Question 4

Which of the following types of insurance provides a specific sum of money on the death of the insured?

Accepted Answer

A)   Casualty
B)   Consumer
C)   Risk
D)   Life
E)   OccurrenceF) A) and C)
G) A) and B)

Question 5

Which of the following,if any,will ABC Insurance most likely be required to prove in order to deny coverage based on the discrepancy between the application and Bobby's driving?

Accepted Answer

A)   Only that Sally's misrepresentation was material.
B)   Only that the company's knowledge of the misrepresentation would have resulted in rejection of Sally's application.
C)   Both that Sally's misrepresentation was material and that knowledge of the misrepresentation would have resulted in the refusal to provide insurance.
D)   That Sally's misrepresentation was material; that knowledge of the misrepresentation would have resulted in rejection of her application; and that the insurer's loss would be in an amount over $10,000.
E)   There is no proof that ABC Insurance can provide to avoid coverage because, as a matter of law, it is clear that coverage must be provided based on Bobby's permissive use of the vehicle.F) A) and C)
G) A) and B)

Question 6

Sally is involved in a motor vehicle accident.She is sued by George,the driver of the other vehicle.Sally calls her insurer and tells them to handle it for her.Later,she is asked to give some information to the insurer regarding the incident and to give a deposition in litigation.She tells the insurer that she is too busy and that the insurer should simply handle the matter because that is the reason she has insurance; and that,furthermore,the insurer should not call her again regarding the accident.Is Sally correct about her duties and why or why not?

Accepted Answer

Sally is incorrect regarding her duties ...

Question 7

Which of the following is false in regard to an insurer's right to cancel a policy of insurance?

Accepted Answer

A)   An insurer who rightfully cancels a policy is not required to a refund of premium payments covering future time periods.
B)   Typically a grace period is required before a policy may be cancelled.
C)   State statutes usually govern the circumstances under which an insurer may cancel a policy.
D)   If an insured fails to pay premiums after a certain period, the insurance company may cancel.
E)   Car insurance may be canceled if the insured loses her license because of a driving violation.F) All of the above
G) A) and E)

Question 8

The government spends large amounts on social insurance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following types of insurance protects a garage owner from liability to persons who are injured by the operation of the garage?

Accepted Answer

A)   Transportation liability
B)   Employee liability
C)   Garage liability
D)   Vehicle liability
E)   PerilF) A) and C)
G) B) and D)

Question 10

Which of the following is true regarding Mark's statement that Sally would never see a jury?

Accepted Answer

A)   He is correct based on provisions in most policies denying the insured the right to contest policy provisions.
B)   He is incorrect, and insurers may not require as a condition of a policy that an insured give up the right to a trial by jury.
C)   He is correct based on provisions in most policies providing that the insurance company has the final word regarding coverage.
D)   He is likely referencing a provision requiring arbitration contained in some policies.
E)   He is likely referencing a provision requiring that any dispute be settled by the Insurance Adjustors of America contained in some policies.F) A) and E)
G) A) and D)

Question 11

Which of the following is false regarding insurance and the international sale of goods?

Accepted Answer

A)   Manufacturers typically have insurance only in their home country because, under international law, the home country's law would be applied in the event of disputes.
B)   Product liability awards may vary in amount from country to country.
C)   Complications may arise from having insurance companies in several different countries.
D)   A manufacturers in Germany, for example, could seek insurance through a German insurance company regardless of where its products are shipped.
E)   Today, manufacturers are likely to have an insurance company in every country to which they ship goods.F) B) and E)
G) All of the above

Question 12

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 coverage was required under the policy because of the mailbox rule.
B)   The court ruled that coverage was not required under the policy because of the mailbox rule.
C)   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.
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 under the unique facts of the case, there was acceptance of the renewal offer preventing a lapse of the policy.F) A) and B)
G) A) and C)

Question 13

In an insurance contract,the beneficiary is another name for the insured.

Accepted Answer

A) True 
 B)False  False

Question 14

Which of the following types of insurance should a business manager purchase to obtain protection against a broad range of risks?

Accepted Answer

A)   A commercial general liability policy
B)   A business tort policy
C)   A litigation commercial policy
D)   An economic protection policy
E)   A business approved policyF) All of the above
G) A) and D)

Question 15

An individual would purchase ______ insurance to protect his or her business from tort liability to third parties.

Accepted Answer

A)   Tort
B)   Property
C)   Litigation
D)   Group
E)   LiabilityF) D) and E)
G) A) and D)

Question 16

An insurer may also be called a[n] _____.

Accepted Answer

A)   Overseer
B)   Underseer
C)   Overwriter
D)   Underwriter
E)   GuarantorF) A) and E)
G) All of the above D

Question 17

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

Accepted Answer

A)   Catalog
B)   Brochure
C)   Application
D)   Notification
E)   PolicyF) C) and D)
G) B) and C) E

Question 18

Which of the following was the result in Life Partners Inc.,v.Miller,the case in the text involving the validity of a state law in Virginia requiring that viatical insurance companies pay certain amounts to terminally-ill policyholders who sell their policies?

Accepted Answer

A)   That the law constituted a valid exercise of the state's police powers and was therefore constitutional.
B)   That the law discriminated against interstate commerce and was therefore unconstitutional.
C)   That the law violated the commerce clause and was therefore unconstitutional.
D)   That the law violated the equal protection clause and was therefore unconstitutional.
E)   That the law violated the due process clause and was therefore unconstitutional.F) C) and E)
G) A) and B)

Question 19

Life insurance protects a person who is unable to work due to disability.

Accepted Answer

A) True 
 B)False

Question 20

If an insurance policy covers an individual's life or health,the insurance is ______ insurance.

Accepted Answer

A)   Personal
B)   Unitary
C)   Individual
D)   Family
E)   ProtectionF) D) and E)
G) All of the above

Exam 51: Insurance Law

Correct Answer
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Which of the following is true regarding Alice's complaint that Prudence failed to help?

Correct Answer
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Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good?

Correct Answer
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Which of the following types of insurance provides a specific sum of money on the death of the insured?

Correct Answer
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Which of the following,if any,will ABC Insurance most likely be required to prove in order to deny coverage based on the discrepancy between the application and Bobby's driving?

Correct Answer
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Correct Answer
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Sally is incorrect regarding her duties ...
View Answer

Which of the following is false in regard to an insurer's right to cancel a policy of insurance?

Correct Answer
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The government spends large amounts on social insurance.

Correct Answer
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Which of the following types of insurance protects a garage owner from liability to persons who are injured by the operation of the garage?

Correct Answer
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Which of the following is true regarding Mark's statement that Sally would never see a jury?

Correct Answer
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Which of the following is false regarding insurance and the international sale of goods?

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In an insurance contract,the beneficiary is another name for the insured.

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False

Which of the following types of insurance should a business manager purchase to obtain protection against a broad range of risks?

Correct Answer
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An individual would purchase ______ insurance to protect his or her business from tort liability to third parties.

Correct Answer
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An insurer may also be called a[n] _____.

Correct Answer
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D

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

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E

Which of the following was the result in Life Partners Inc.,v.Miller,the case in the text involving the validity of a state law in Virginia requiring that viatical insurance companies pay certain amounts to terminally-ill policyholders who sell their policies?

Correct Answer
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Life insurance protects a person who is unable to work due to disability.

Correct Answer
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If an insurance policy covers an individual's life or health,the insurance is ______ insurance.

Correct Answer
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Exam 51: Insurance Law

Correct AnswerverifiedShow Answer

Which of the following is true regarding Alice's complaint that Prudence failed to help?

Correct AnswerverifiedShow Answer

Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good?

Correct AnswerverifiedShow Answer

Which of the following types of insurance provides a specific sum of money on the death of the insured?

Correct AnswerverifiedShow Answer

Which of the following,if any,will ABC Insurance most likely be required to prove in order to deny coverage based on the discrepancy between the application and Bobby's driving?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedSally is incorrect regarding her duties ...View AnswerShow Answer

Which of the following is false in regard to an insurer's right to cancel a policy of insurance?

Correct AnswerverifiedShow Answer

The government spends large amounts on social insurance.

Correct AnswerverifiedShow Answer

Which of the following types of insurance protects a garage owner from liability to persons who are injured by the operation of the garage?

Correct AnswerverifiedShow Answer

Which of the following is true regarding Mark's statement that Sally would never see a jury?

Correct AnswerverifiedShow Answer

Which of the following is false regarding insurance and the international sale of goods?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In an insurance contract,the beneficiary is another name for the insured.

Correct AnswerverifiedFalse

Which of the following types of insurance should a business manager purchase to obtain protection against a broad range of risks?

Correct AnswerverifiedShow Answer

An individual would purchase ______ insurance to protect his or her business from tort liability to third parties.

Correct AnswerverifiedShow Answer

An insurer may also be called a[n] _____.

Correct AnswerverifiedD

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

Correct AnswerverifiedE

Which of the following was the result in Life Partners Inc.,v.Miller,the case in the text involving the validity of a state law in Virginia requiring that viatical insurance companies pay certain amounts to terminally-ill policyholders who sell their policies?

Correct AnswerverifiedShow Answer

Life insurance protects a person who is unable to work due to disability.

Correct AnswerverifiedShow Answer

If an insurance policy covers an individual's life or health,the insurance is ______ insurance.

Correct AnswerverifiedShow Answer

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Sally is incorrect regarding her duties ...
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False

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D

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E

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