Contract Law, Producers & Types of Insurers

Question 1

Insurance Policy

Answer 1

A legal contract between 2 parties
1. The Insurer
2.The Policy Owners (Insured)

Question 2

Personal Contract

Answer 2

Owned by the policyowner/insured party
-Property & Liability Policies

Question 3

4 Elements of A Contract

Answer 3

1. Agreement
2. Consideration
3. Competent Parties
4. Legal Purpose

Question 4

Agreement

Answer 4

A valid offer and unconditional acceptance that must be present in order for the contract to be enforceable.

Question 5

Offer

Answer 5

-A Proposal by one party that, if accepted by another, will create and agreement
-the “offer” is generally made by the applicant for insurance
-The insurer either accepts or declines (rejects) the offer based on its underwriting criteria

Question 6

Acceptance

Answer 6

If the insurer accepts the offer, both parties have arrived at an agreement
-The insurer issuing or the producer delivering the policy is the acceptance

Question 7

Invitation

Answer 7

When the applicant submits an application without an initial premium
-the offer is not complete unless the premium is included in th

Question 8

Counteroffer

Answer 8

The original offer made by the applicant has been rejected by the insurer
-the original offer is off the table