Reference no: EM131269053

1. Gerald Tee has a $50,000 property loss. His insurance policy's coverage limit is $35,000, and has a $500 deductible applied to the policy. How much will Gerald collect?

2. If there were a $22,000 loss and a $700 straight deductible, the insurer would pay how much? 

3. To determine if a loss is covered by a property insurance contract, you should look at all of the following except?

a) all applicable exclusions b)the subrogation clause c) what property is covered d) the dollar limitations for recovery

4. Which of the following items is not a benefit of standard insurance policies?

a) smaller insurers can offer cheaper insurance than larger companies if standard policies are used.

b) litigation should be reduced as policy meaning becomes understood.

c) consumers are more likely to learn the meaning of standard policies

d) data collection and loss rate computation are easier and more accurate. 

4. The personal feature of property insurance contracts means that:

a) subrogation always applies 

b) ambiguities in the wording will always be construed against the insurer 

c) insurance contracts cannot be freely transferred to other parties 

d) the buyer of insurance must have insurable interest in property before the policy is issued 

5. Jasmine phones her agent to obtain auto insurance. The agent binds coverage over the phone, and tells her she will have a $250 collision deductible. When the insurer issues the policy, the underwriter imposes a $1,000 deductible because of Jasmine's poor driving record, then mails her the policy. She does not read it or notice this change until she has an accident six months later. She then demands that the insurer only require a $250 deductible rather than a $1,000 deductible, since she did not approve this change. Which legal principle of insurance contracts would be the insurer's most convincing reason for refusing to honor the $250 deductible?

a) contract of adhesion b) parol evidence rule c) indemnity d) utmost good faith 

6. If a property insurance agent goes to Maria's door, convinces her to apply for insurance and write a check for the policy premium, which of the following has occurred?

a) offer, acceptance b) soliciting an offer, offer, acceptance, consideration c) offer, counter offer, acceptance, consideration d) offer, consideration 

7. What is the principle of indemnity?

a) a court precedent that gives insureds the right to sue their insurers if they get bad claims service

b) the rule that a person may not collect more than his actual loss in the event of damage caused by an insured peril 

c) the rule that a person will not be reimbursed for a loss unless he can show proof of loss 

d) a way of requiring a person to pay a premium