Unit 2 Contracts Flashcards
Fill out the acronym CLOAC
Consideration
Legal Purpose
Offer
Acceptance
Competent Parties
Insurance policies are contracts of ____. Their provisions are written by only one party to the contract, and the other party is required to stick to them.
Adhesion
Insurance policies are ____ contracts, meaning that the value received from the contract by each party is unequal. You could pay small premiums and have a large claim or pay premiums for many years without a single claim.
Aleatory
Insurance policies are ____, or one-sided, contract because only one party is legally bound to perform under the contract.
Unilateral
Are insurance policies conditional?
Yes
Insurance policies are contracts of ____, meaning that the contract is intended to restore the insured to the financial state they enjoyed prior to the occurrence of the loss - no more, no less.
Indemnity
A ____ is a statement that the applicant believes to be true. Statements made on an application by the insured are representations. A ____ is a representation that is actually false.
Representation, Misrepresentation
____ is false information and it will void contracts. It must be information that was a determining factor in the insurer’s decision to accept the risk and/or charge a higher premium.
Material Misrepresentations
A ____ is a statement that is guaranteed to be true.
Warranty
____ is the failure to disclose known facts.
Concealment
____ is an intentional act designed to deceive and induce another party to part with something of value.
Fraud
____ is defined as the intentional and voluntary giving up a known right.
Waiver
____ means that once a right has been waived, it cannot be reinstated and used against the insured.
Estoppel
