Joan and Steven have applied for automobile insurance with ABC Auto Insurers. They do not tell the agent that their neighbor, George, who lost his drivers license due to drunk driving, uses one of their cars on a regular basis to drive to work. Once the company found out about George after he had an accident, they denied the claim, citing what legal concept as the reason?

A) Misrepresentation.

B) Breach of warranty.

C) Concealment.

D) Fraud.

Answer: C

Insurance Transaction

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

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All of the following are considered limited lines of authority EXCEPT
What is the other term for the cash payment settlement option?
The pro rata liability clause is designed to protect the principle of
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Fixed annuities provide each of the following EXCEPT
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A domestic insurer issuing variable contracts must establish one or more
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All of these statements about the Waiver of Premium provision are correct EXCEPT
Which of the following best defines target premium in a universal life policy?
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A beneficiary change can occur
No existing agent's license will be revoked until
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The pro rata liability clause is designed to protect the principle of
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Life insurance policies will normally pay for losses arising from
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Ambiguities in an insurance policy are always resolved in favor of the
In an insurance contract, the applicant's "consideration" is the
Agents may be found guilty of defamation if they make a false statement that is intended to?
How many pair of glasses in a 12-month period will a vision expense insurance plan cover?
The voluntary relinquishment of a legal right is called
What documentation grants express authority to an agent?
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Which contract element is insurable interest a component of?
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All of the following are true regarding a decreasing term policy EXCEPT
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All of the following statements concerning dividends are true EXCEPT:
All of the following are true regarding rebates EXCEPT
Which of the following is NOT a characteristic of an insurable risk?
All of the following are elements of an insurance policy EXCEPT
What would be an expense factor in an insurance program?
All of the following are true of key person insurance EXCEPT
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Who is responsible for assembling the policy forms for insureds?
Life income joint and survivor settlement option guarantees
What is the other term for the cash payment settlement option?
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What is the purpose of establishing the target premium for a universal life policy?
Which of the following is NOT true regarding the accumulation period of an annuity?
Group health plans may deny participation based upon the
In insurance, an offer is usually made when
Which of the following is true regarding a market value adjusted annuity?
What is the other term for the cash payment settlement option?
What documentation grants express authority to an agent?

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

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