Colorado Property - Policy Provisions
And Contract Law
Appraisal
a professional assessment to determine extent of damage
Earned premium
the portion of premium paid in advance that now belongs to the insurer because it
applies to the elapsed part of the policy
Liberalization
the removal or loosening of restrictions
Negligence
the failure to use the care that a reasonable, prudent person would under the same or
similar circumstances
Policyowner
the person entitled to exercise the rights and privileges in the policy
Third party
a person (or group) other than the two involved in an insurance contract (insured and
insurer)
Underwriting
risk selection; the process of reviewing applications for insurance to determine eligibility
for coverage
Which of the following is NOT the consideration in a policy?
A) The application given to a prospective insured
,B) Something of value exchanged between parties
C) The premium amount paid at the time of application
D) The promise to pay covered losses
A) The application given to a prospective insured
___ is something of value that is transferred between the two parties to form a
legal contract.
Consideration
An insurer neglects to pay a legitimate claim that is covered under the terms of
the policy. Which of the following insurance principles has the insurer violated?
A) Adhesion
B) Consideration
C) Good faith
D) Representation
B) Consideration
The binding force in any contract is ___. ___ on the part of the insured is the
payment of premiums and the health representations made in the application. ___
on the part of the insurer is the promise to pay in the event of loss.
Consideration
Who is responsible for filling out a notice of claim form?
A) Agent
B) Insurer
C) Insured
D) Adjuster
,C) Insured
Notice of claim is a form or statement from an ___ to an insurer, informing the
insurer that events leading to a possible claim have occurred.
Insured
Untrue statements on the application unintentionally made by insureds that, if
discovered, would alter the underwriting decision of the insurance company, are
called
A) Material misrepresentations.
B) Fraudulent statements.
C) Warranties.
D) Common errors.
A) Material misrepresentations.
A ___ is a statement that, if discovered, would alter the underwriting decision of
the insurance company.
Material misrepresentation
The Federal Fair Credit Reporting Act
A) Prevents money laundering.
B) Regulates consumer reports.
C) Protects customer privacy.
D) Regulates telemarketing.
B) Regulates consumer reports.
The ___ regulates consumer reports, also known as consumer investigative
reports, or credit reports.
, Federal Fair Credit Reporting Act
The policy conditions define
A) The amount of coverage.
B) How parties to the contract must act following a loss.
C) The basic underwriting information.
D) The excluded perils.
B) How parties to the contract must act following a loss.
___ is an essential part of a policy structure. ___ define what each party to the
policy is required to do contractually in the event of a loss.
Conditions
Which of the following is NOT an essential element of an insurance contract?
A) Counteroffer
B) Consideration
C) Agreement
D) Legal purpose
A) Counteroffer
In order for insurance contracts to be legally binding, they must have four
essential elements: agreement (offer and acceptance), consideration, competent
parties, and legal purpose. ___ is not required.
Counteroffer
In insurance, an offer is usually made when
A) The agent hands the policy to the policyholder.
B) An agent explains a policy to a potential applicant.
And Contract Law
Appraisal
a professional assessment to determine extent of damage
Earned premium
the portion of premium paid in advance that now belongs to the insurer because it
applies to the elapsed part of the policy
Liberalization
the removal or loosening of restrictions
Negligence
the failure to use the care that a reasonable, prudent person would under the same or
similar circumstances
Policyowner
the person entitled to exercise the rights and privileges in the policy
Third party
a person (or group) other than the two involved in an insurance contract (insured and
insurer)
Underwriting
risk selection; the process of reviewing applications for insurance to determine eligibility
for coverage
Which of the following is NOT the consideration in a policy?
A) The application given to a prospective insured
,B) Something of value exchanged between parties
C) The premium amount paid at the time of application
D) The promise to pay covered losses
A) The application given to a prospective insured
___ is something of value that is transferred between the two parties to form a
legal contract.
Consideration
An insurer neglects to pay a legitimate claim that is covered under the terms of
the policy. Which of the following insurance principles has the insurer violated?
A) Adhesion
B) Consideration
C) Good faith
D) Representation
B) Consideration
The binding force in any contract is ___. ___ on the part of the insured is the
payment of premiums and the health representations made in the application. ___
on the part of the insurer is the promise to pay in the event of loss.
Consideration
Who is responsible for filling out a notice of claim form?
A) Agent
B) Insurer
C) Insured
D) Adjuster
,C) Insured
Notice of claim is a form or statement from an ___ to an insurer, informing the
insurer that events leading to a possible claim have occurred.
Insured
Untrue statements on the application unintentionally made by insureds that, if
discovered, would alter the underwriting decision of the insurance company, are
called
A) Material misrepresentations.
B) Fraudulent statements.
C) Warranties.
D) Common errors.
A) Material misrepresentations.
A ___ is a statement that, if discovered, would alter the underwriting decision of
the insurance company.
Material misrepresentation
The Federal Fair Credit Reporting Act
A) Prevents money laundering.
B) Regulates consumer reports.
C) Protects customer privacy.
D) Regulates telemarketing.
B) Regulates consumer reports.
The ___ regulates consumer reports, also known as consumer investigative
reports, or credit reports.
, Federal Fair Credit Reporting Act
The policy conditions define
A) The amount of coverage.
B) How parties to the contract must act following a loss.
C) The basic underwriting information.
D) The excluded perils.
B) How parties to the contract must act following a loss.
___ is an essential part of a policy structure. ___ define what each party to the
policy is required to do contractually in the event of a loss.
Conditions
Which of the following is NOT an essential element of an insurance contract?
A) Counteroffer
B) Consideration
C) Agreement
D) Legal purpose
A) Counteroffer
In order for insurance contracts to be legally binding, they must have four
essential elements: agreement (offer and acceptance), consideration, competent
parties, and legal purpose. ___ is not required.
Counteroffer
In insurance, an offer is usually made when
A) The agent hands the policy to the policyholder.
B) An agent explains a policy to a potential applicant.
