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Insurance law (IL)

Last Update 1 day ago
Total Questions : 118

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Question # 21

Which of the following is a typical remedy for an insurer when the insured breaches a warranty?

Options:

A.  

The insurer must continue to provide coverage, but with an increased premium

B.  

The insurer may cancel the contract or refuse to pay a claim

C.  

The insurer can sue the insured for breach of contract

D.  

The insurer is obligated to reduce the payout amount based on the breach

Discussion 0
Question # 22

If the amount to be paid in the event of a total loss of insured property is agreed between the proposer and the insurer at inception of the policy, this is a modification of the principle of

Options:

A.  

good faith.

B.  

contribution.

C.  

indemnity.

D.  

subrogation.

Discussion 0
Question # 23

How do an insurer's subrogation rights differ, if at all, between a theft policy and a personal accident policy?

Options:

A.  

Subrogation rights only apply under a theft policy.

B.  

Subrogation rights do not apply under either policy.

C.  

Subrogation rights only apply under a personal accident policy.

D.  

Subrogation rights apply under both policies.

Discussion 0
Question # 24

For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of an express term in reaching or recording an agreement?

Options:

A.  

It will usually override any implied term which conflicts with it.

B.  

It must be evidenced in documentary form.

C.  

It may be oral or in writing.

D.  

It may be implied by conduct.

Discussion 0
Question # 25

Paul made a formal offer to John and gave hun (out weeks to accept it. Three weeks later, and before, John had responded. Paul needed to withdraw the offer. What is the position in contract law?

Options:

A.  

Paul does not have the right to withdraw the offer within the four-week period.

B.  

John cannot enforce the contract but is entitled to claim damages from Paul.

C.  

Paul has the right to withdraw the offer at any time before acceptance.

D.  

John can enforce the contract as the offer was formally made.

Discussion 0
Question # 26

For this question more than 1 option is correct. You must select all the correct options to gain the mark.

A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?

Options:

A.  

Reject the claim, but maintain the policy.

B.  

Reduce the claim amount in proportion to the premium it would have charged.

C.  

Apply any terms it would have applied if the misrepresentation had not taken place.

D.  

Avoid the contract, refuse all claims and keep the premium.

Discussion 0
Question # 27

At what stage is insurable interest required for a marine cargo insurance policy?

Options:

A.  

At the time of the loss only.

B.  

Throughout the duration of the contract.

C.  

At inception of the policy only.

D.  

At both inception of the policy and at the time of the loss.

Discussion 0
Question # 28

Insurance agencies are usually created by way of

Options:

A.  

implied agreement.

B.  

unilateral agreement.

C.  

express agreement.

D.  

deed of agreement.

Discussion 0
Question # 29

A risk control survey shows that premises proposed for insurance are in close proximity to a river with a history of flooding. The underwriter will consider this fact to be a

Options:

A.  

moral hazard.

B.  

physical hazard.

C.  

fundamental risk.

D.  

pure risk.

Discussion 0
Question # 30

A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?

Options:

A.  

Pay the claim in full.

B.  

Reject the claim for breach of warranty.

C.  

Make an ex-gratia payment.

D.  

Avoid the policy ab initio.

Discussion 0
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