CPCU 530 Quiz/Exam |Questions and Answers
A producer may have apparent authority when no actual agency relationship
exists. In such cases, the law holds that an agency relationship may exist,
depending on the conduct of the
Select one:
A. Insurer.
B. Non-principal party.
C. Producer.
D. Insurance applicant and how the applicant perceives the agency
relationship. - -A. Insurer.
- Which one of the following would most likely be recognized by a court as
something that an insurer could properly waive?
Select one:
A. Public policy prohibiting insuring illegal goods
B. The doctrine of insurable interest
C. Policy notice of loss requirements
D. A policy exclusion - -C. Policy notice of loss requirements
Insurers can waive any policy provision, providing it involves a right—even
standard policy language. Insurers cannot waive matters that further public
policy, like the doctrine of insurable interest, and they cannot waive policy
exclusions.
- Denny properly mortgaged land to Marvin to secure a loan for $100,000
and then he conveyed the land to Ben. If Denny or Ben does not pay the loan
when it falls due
Select one:
A. Marvin has no right to foreclose on the mortgage.
B. If the proceeds of a foreclosure sale are insufficient to satisfy the debt to
Marvin, he has no right to obtain a deficiency judgment against Denny.
C. Ben cannot lose his interest because it is not subject to Marvin's mortgage
rights.
D. If a foreclosure sale yields excess money, it goes to Denny as mortgagor
or to Ben, the subsequent buyer. - -D. If a foreclosure sale yields excess
money, it goes to Denny as mortgagor or to Ben, the subsequent buyer.
- Which one of the following statements is true regarding warranties?
Select one:
A. Warranties only need to be substantially true in order to be valid.
B. Warranties can create a void contract, but only if the insured knew them
to be deceitful.
C. Warranties are presumed to be immaterial, but their breach makes the
contract voidable.
, D. Warranties may be either material or immaterial and are part of the final
contract. - -D. Warranties may be either material or immaterial and are part
of the final contract.
- Which one of the following presents the two central elements that can give
rise to an estoppel?
Available answer optionsSelect only one option
A
Incorrect statement of facts and intent
B
Knowledge and intentional relinquishment of a known right
C
Voluntary choice and inconsistent rights or privileges
D
Reliance and detriment - -D. Reliance and Detriment
The central element giving rise to estoppel is that the insured has acted or
refrained from action in reliance on the insurer's position and has
consequently suffered detriment. Knowledge and intentional relinquishment
of a known right are elements of waiver. Incorrect statement of facts and
intent are elements of misrepresentation. Voluntary choice and inconsistent
rights or privileges are elements of election.
- Gabriela is an insurance agent selling a property policy to Oscar. Before
the policy was issued, Gabriela assured Oscar that he would not have to add
a sprinkler system to the building he was insuring. After coverage was
bound, there was a fire in the building and Oscar made a claim for the
damages. The insurer denied coverage citing a policy provision that the
building be sprinklered. At trial, Gabriela's assurance that sprinklers were not
needed was
Available answer optionsSelect only one option
A
Admissible because the insurer did not inspect the building before coverage.
B
Inadmissible because the insurer's receipt of premium created an implied
waiver.
C
Admissible because her statement created an implied waiver.
D
Inadmissible because the parol evidence rule applies. - -D
Inadmissible because the parol evidence rule applies.
Inadmissible because the parole evidence rule applies. An agent's oral
promise to waive future breaches before or during the finalizing of a policy is
ineffective as a waiver.
A producer may have apparent authority when no actual agency relationship
exists. In such cases, the law holds that an agency relationship may exist,
depending on the conduct of the
Select one:
A. Insurer.
B. Non-principal party.
C. Producer.
D. Insurance applicant and how the applicant perceives the agency
relationship. - -A. Insurer.
- Which one of the following would most likely be recognized by a court as
something that an insurer could properly waive?
Select one:
A. Public policy prohibiting insuring illegal goods
B. The doctrine of insurable interest
C. Policy notice of loss requirements
D. A policy exclusion - -C. Policy notice of loss requirements
Insurers can waive any policy provision, providing it involves a right—even
standard policy language. Insurers cannot waive matters that further public
policy, like the doctrine of insurable interest, and they cannot waive policy
exclusions.
- Denny properly mortgaged land to Marvin to secure a loan for $100,000
and then he conveyed the land to Ben. If Denny or Ben does not pay the loan
when it falls due
Select one:
A. Marvin has no right to foreclose on the mortgage.
B. If the proceeds of a foreclosure sale are insufficient to satisfy the debt to
Marvin, he has no right to obtain a deficiency judgment against Denny.
C. Ben cannot lose his interest because it is not subject to Marvin's mortgage
rights.
D. If a foreclosure sale yields excess money, it goes to Denny as mortgagor
or to Ben, the subsequent buyer. - -D. If a foreclosure sale yields excess
money, it goes to Denny as mortgagor or to Ben, the subsequent buyer.
- Which one of the following statements is true regarding warranties?
Select one:
A. Warranties only need to be substantially true in order to be valid.
B. Warranties can create a void contract, but only if the insured knew them
to be deceitful.
C. Warranties are presumed to be immaterial, but their breach makes the
contract voidable.
, D. Warranties may be either material or immaterial and are part of the final
contract. - -D. Warranties may be either material or immaterial and are part
of the final contract.
- Which one of the following presents the two central elements that can give
rise to an estoppel?
Available answer optionsSelect only one option
A
Incorrect statement of facts and intent
B
Knowledge and intentional relinquishment of a known right
C
Voluntary choice and inconsistent rights or privileges
D
Reliance and detriment - -D. Reliance and Detriment
The central element giving rise to estoppel is that the insured has acted or
refrained from action in reliance on the insurer's position and has
consequently suffered detriment. Knowledge and intentional relinquishment
of a known right are elements of waiver. Incorrect statement of facts and
intent are elements of misrepresentation. Voluntary choice and inconsistent
rights or privileges are elements of election.
- Gabriela is an insurance agent selling a property policy to Oscar. Before
the policy was issued, Gabriela assured Oscar that he would not have to add
a sprinkler system to the building he was insuring. After coverage was
bound, there was a fire in the building and Oscar made a claim for the
damages. The insurer denied coverage citing a policy provision that the
building be sprinklered. At trial, Gabriela's assurance that sprinklers were not
needed was
Available answer optionsSelect only one option
A
Admissible because the insurer did not inspect the building before coverage.
B
Inadmissible because the insurer's receipt of premium created an implied
waiver.
C
Admissible because her statement created an implied waiver.
D
Inadmissible because the parol evidence rule applies. - -D
Inadmissible because the parol evidence rule applies.
Inadmissible because the parole evidence rule applies. An agent's oral
promise to waive future breaches before or during the finalizing of a policy is
ineffective as a waiver.
