Unit 2 quiz Insurance

An insurance contract is prepared by one party (the insurance company) with little or no opportunity for the other party (the inured) to bargain. This characteristic is called

• conditional

• unilateral

• aleatory

• adhesion

In insurance, an insured may pay premiums for many years without having a loss, or an insured may suffer a loss and get a larger amount of money from the insurance company than he has paid in premiums. For this reason, an insurance contract is

• aleatory

• unilateral

• personal

• conditional

In an insurance contract, the consideration that the insured gives in called

• the premium payment

• the offer

• the acceptance

• the agreement

Which of the following individuals would be considered a competent party in an insurance contract?

• curt, who turns 12 at the end of the year

• stephan, who is 21, does not have a job, and lives at home with his parents

• Maria, who has been drinking heavily at a bar prior to meeting with her insurance agent

• alexis, who recently was diagnosed mentally insane

An agreement between two parties is also called

• adhesion

• aleatory

• offer and acceptance

• unilateral

Anthony intentionally lied on his insurance application to obtain coverage. This is an example of

• concealment

• fraud

• estoppel

• adhesion

The failure to disclose known facts is

• material misrepresentation

• concealment

• waiver

• fraud

A statement that is guaranteed to be true is

• a warranty

• a representation

• an impersonation

• a misrepresentation

Allison's auto insurance policy is due on the 10th of each month. Ever since she has had the policy, she has sent the premium in on the 16th of the month. the insurer has been accepting the premium this way for the past 5 years. A new CEO takes over and decides to cancel Allison's policy for a nonpayment of premium. Allison contests this decision and legally gets the policy reinstated. The decision to reinstate the policy in as example of

• waiver

• adhesion

• aleatory

• estoppel

Misrepresentation do not necessarily void insurance contracts. to do so, they must be

• material

• unilateral

• personal

• warranties