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Insurance-A Comprehensive Study Guide by Ashley Morris
Terms in this set (20)
Boyce obtains from Capital Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy, an estimate of the value by an impartial third party can be demanded. This is
an appraisal clause.
Dhani is the beneficiary of a life insurance policy on Elmo's life obtained from Famed Insurance Company. The insured under this policy is
Chocolate Gourmet Company obtains an insurance policy to protect against losses incurred by the firm as a result of being held liable for personal injuries or property damage sustained by others. This is
Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance policy on Speedy's warehouse. On the application, Speedy misrepresents the age of the property to obtain a lower premium. When a fire soon destroys the warehouse, TransInsurance can
deny payment, because of Speedy's fraud in the application.
International Foods Corporation insures its real and personal property, as well as the lives of its key employees, to protect its financial interest should some event undermine its security. This is
Kerin obtains a property insurance policy for her art collection from Lawton Insurance Company. Lawton can cancel the policy
at any time.
For Diana to obtain an insurance policy on Eden Farm, including its crops, equipment, and livestock, she must have an insurable interest in the property that exists
at the time a loss occurs.
General Allied Company obtains insurance policies with Hy-Rate Insurance, Inc., and Ideal InsurCo against the risk of loss of General's office building in a fire. Each policy includes a multiple-insurance clause. A fire partially destroys the building. General can collect from Hy-Rate
its proportionate share of the loss to the total amount of insurance.
EZ Rentals Company wants to insure the equipment that it rents to the public. To obtain insurance, EZ must have an insurable interest in the property
at the time a loss occurs.
Edy obtains a homeowners' insurance policy with First Source Insurance Company. First State can cancel the policy
if Edy fails to pay the premiums.
Bob applies to City Insurance Company for insurance. City issues a policy, but later discovers that Bob's application includes several misstatements. Most likely, these misstatements can
void the policy.
Investors Commercial Property Corporation obtains an insurance policy that protects against any losses incurred as a result of existing claims against or liens on certain property at the time of its purchase. This is
Grace applies for a homeowners' insurance policy on her house with Heroic Insurance Company through Ian, a broker. In this transaction, Ian is
Grace's agent, and not Heroic's agent.
Bret obtains a fire insurance policy on his rental house with Continental Insurance Company. Like all insurance, this policy is an arrangement for
transferring and allocating risk.
Lila obtains a life insurance policy with no cash surrender value and names her son Maurice as the beneficiary. This is
term life insurance.
Dag obtains from Excel Insurance Company a policy that provides that Dag has thirty days after a premium's due date to pay it before the policy will be canceled. This is
an antilapse clause.
Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the maximum possible recovery for the lowest possible premium. To obtain the maximum recovery under a coinsurance clause, the percentage of the value of the property that should be insured is
Dale and Ernie are partners who own and operate Cluck'n Hut, a chain of fast food restaurants. Their partnership obtains insurance on the owners' lives. This is
Grover is an accountant with the firm of Hall & Associates, which obtains insurance from Interstate Insurance, Inc, on Grover's life. Grover dies. The proceeds of the policy belong to
Hall & Associates.
Ginny obtains a health insurance policy for her family from Hope Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for two or three years
Hope cannot contest Ginny's statements in the application.
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