1D

Question 1

Insurance Policy

Answer 1

legal agreement btw policyowner & insurance co

Question 2

Elements of a Contract

Answer 2

1. Offer & Acceptance
2. Consideration
3. Legal Purpose
4. Competent Parties

Question 3

Elements of a Contract

Answer 3

C.O.A.L.

Question 4

Aleatory Contract

Answer 4

potential to be unequal in value between the parties. (ie. claims paid by insurer can be larger than premiums paid for insurance)

Question 5

Adhesion

Answer 5

one party has greater power over the other. “take it or leave it” contract. ambiquities will be interpreted in favor of the insured.

Question 6

Unilateral

Answer 6

one sided. ie insurance contract

Question 7

Insurance Policy

Answer 7

is an act (payment of premiums) in exchange of a promise (future benefits)

Question 8

Utmost Good Faith

Answer 8

insurance contract is considered a contract of utmost good faith

Question 9

Representations

Answer 9

statements made by an applicant for insurance

Question 10

Warranty

Answer 10

a sworn statement

Question 11

Fraud

Answer 11

intentional misrepresentation, omission or concealment of material fact

Question 12

Waiver

Answer 12

when a person gives up a previously known right

Question 13

Estoppel

Answer 13

when a person waives a right they are estopped from exercising the right in the future

Question 14

Personal Contract

Answer 14

Insurance follows the person, not the property.

Question 15

Conditional Contract

Answer 15

conditions are applicable to both the insurance co and the insured

Question 16

Insured is required to:

Answer 16

1. provide prompt notification
2. cooperate with any investigation
3. protect property from further damage
4. submit a proof-of-loss statement
5. submit to examination under oath, if requested

Question 17

Insurer is required to:

Answer 17

live up to the contract’s promise