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Property and Casualty Chapter 2 Questions
with Answers (100% Correct Answers)
An insurance company that is owned by its stockholders (or shareholders) and
is run for the benefit of the stockholders is known as a ____ company. Answer:
Stock
An insurance company that has no stockholders and therefore is run for the
benefit of its policy owners is called a ____ company. Answer: Mutual
A type of mutual insurance company that requires its customers to join the club
in order to buy their insurance is called a ____. Answer: Fraternal
Businesses that join together in order to self insure rather than purchase
insurance from an insurance company (group self insurance) are called ____
groups. Answer: Risk retention
An insurance company chartered in your home state is called a ____ insurer. A
company chartered in another state of the U.S. is called a foreign insurer. A
company chartered in another country is called an alien insurer. Answer:
domestic, foreign, alien
Insurance companies that have permission to do business in your state are
called _____ insurers. Answer: Admitted
The five required elements of a contract are ___, ____, ____, ____, and _____.
Answer: offer, acceptance, consideration, legal purpose and legally competent
parties.
A statement on an application for insurance that is taken as the absolute truth is
called a _____. Answer: Warranty
A statement on an application that is taken to be true to the best of the
applicant's knowledge and belief is called a ____. Answer: Representation
Property and Casualty Chapter 2 Questions
with Answers (100% Correct Answers)
An insurance company that is owned by its stockholders (or shareholders) and
is run for the benefit of the stockholders is known as a ____ company. Answer:
Stock
An insurance company that has no stockholders and therefore is run for the
benefit of its policy owners is called a ____ company. Answer: Mutual
A type of mutual insurance company that requires its customers to join the club
in order to buy their insurance is called a ____. Answer: Fraternal
Businesses that join together in order to self insure rather than purchase
insurance from an insurance company (group self insurance) are called ____
groups. Answer: Risk retention
An insurance company chartered in your home state is called a ____ insurer. A
company chartered in another state of the U.S. is called a foreign insurer. A
company chartered in another country is called an alien insurer. Answer:
domestic, foreign, alien
Insurance companies that have permission to do business in your state are
called _____ insurers. Answer: Admitted
The five required elements of a contract are ___, ____, ____, ____, and _____.
Answer: offer, acceptance, consideration, legal purpose and legally competent
parties.
A statement on an application for insurance that is taken as the absolute truth is
called a _____. Answer: Warranty
A statement on an application that is taken to be true to the best of the
applicant's knowledge and belief is called a ____. Answer: Representation
