Gerneral Insurance questions

You are to complete this completely on your own. Provide a citation for any outside source of information that you use.

1. The basic parts of an insurance contract are often summarized with the acronym ______________________. Please briefly discuss four of the five parts of a standard insurance policy.

2. Discuss and provide examples of exclusions that are necessary in any commercial insurance policy. Explain the problem that may ensue if either of these exclusions are not part of a policy.

3. If an applicant for life or health insurance is concerned about becoming disabled and being unable to pay the insurance premiums, a ________________________________ rider should be purchased as part of the policy.

4. Provide a hypothetical example that explains the difference between an aggregate deductible and a straight deductible.

5. Coinsurance clauses are found in many property policies as well as in many health insurance policies, although the purpose of each is vastly different. Explain the purpose of the coinsurance in both types of insurance.

Coinsurance in property insurance:

Coinsurance in health insurance:

6. Assume Alvin purchases a home for $200,000 and also purchases a homeowners’ policy. He is not concerned about a total loss as he lives very near a fire station, so he purchases $160,000 of coverage on his home, knowing that this homeowners policy has an 80% coinsurance clause. Should he have a $20,000 loss on his home, how much with his insurer pay for the loss? Please show your work.

7. Several Other Insurance clauses may be included in property insurance policies. Sam’s policy has a pro rata provision. Without disclosing to the insurers that he is purchasing multiple policies on his $20,000 building, Sam purchases a property policy with Company A for $20,000 and then purchases a policy from Company B for $30,000. Should Sam have a $10,000 loss to his building, how much will be paid by each insurer? Please show your work.

a. Insurer A _____________

b. Insurer B _____________

8. An individual who is injured as result of a tort may bring a legal action against the person who caused the injury. In a court of law, the injured party is known as the _______________________________

9. Kate opened a delivery business and hired a delivery driver. When her driver ran a stop sign and injured another motorist, the injured motorist sued Kate as the employer of the negligent driver. Transferring the liability of one person to another person is called ________________________________________________________.

10. Which of the following statements is (are) true with respect to the degree of care owed by property owners to those who visit their property? Please explain your answers.

T/F Property owners owe the same degree of care to all visitors to their property. __________________________________________________________________

T/F A higher degree of care is owed to an invitee than is owed to a trespasser. __________________________________________________________________

11. Provide a hypothetical example of the following defenses to a liability claim:

a. Assumption of risk

b. Last clear chance rule

c. Contributory negligence

12. Bob was severely injured as a result of Sam’s negligence. As payment for things that cannot be itemized, such as pain, suffering, and disfigurement, Bob will receive _____________________________ damages.

13. All of the following are elements that must be established for an act to be deemed negligent EXCEPT

a. Existence of a legal duty to use reasonable care

b. Damage or injury to the claimant

c. Proximate cause between the failure to use reasonable care and the injury

d. No contribution to the injury by the injured party

14. a. What is meant by Tort Reform? Provide and briefly explain two issues that are typically addressed in tort reform.

b. One tort reform proposal involves modification of a legal doctrine that prevents the defendant from introducing evidence that shows that the injured party has received other compensation for the injury. This legal doctrine is called the ______________________________________________________________

15. Which of the following statements is (are) true with respect to defenses against negligence claims?

· Under contributory negligence, an injured person who contributes to his injury is barred from recovery.

· Under comparative negligence, an injured person who contributes to her injury may recover damages.

a. II only b. both I and II c. neither I nor II d. I only

16. Using the internet, cite a liability case that was based on the doctrine of Res Ipsa Loquitur, and provide a brief summary.

17. Briefly discuss the following laws and explain the key changes that resulted from each:

a. Sarbanes-Oxley Act

b. Dodd-Frank Wall Street Reform and Consumer Protection Act

c. McCarren Ferguson Act

d. Modernization Act

18. The most common Homeowners’ Insurance Policy is the HO-3. This policy consists of two basic parts, Section I and Section II. Please define each of the six coverages and provide an example of a claim that would be covered in each.

Section I

Coverage A

Coverage B

Coverage C

Coverage D

Section II

Coverage E

Coverage F