Ch49-TB2-WBL-10O¦êv-F to Eric

Ch49-TB2-WBL-10O¦Ã&ordf...

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Chapter 49 Insurance N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. Risk management involves the transfer of certain risks from a party to an  insurance company through a contractual agreement. ANSWER: T PAGE: 988 TYPE: N 2. All-risk insurance  is property insurance that covers damage resulting from  all risks not specifically excluded. ANSWER: T PAGE: 989 TYPE: N 3. Insurance is classified according to the nature of the risk involved. ANSWER: T PAGE: 989 TYPE: = 4. A business firm may have an insurable interest in the life of a key em- ployee. ANSWER: T PAGE: 990 TYPE: = 243
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244 TEST BANK 2—UNIT ELEVEN: SPECIAL TOPICS 5. A spouse may have an insurable interest in his or her spouse’s life. ANSWER: T PAGE: 990 TYPE: =
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CHAPTER 49: INSURANCE 245 6. An insurable interest in property must exist when a policy is purchased. ANSWER: F PAGE: 991 TYPE: = 7. An insurance agent ordinarily works for the insurance company. ANSWER: T PAGE: 993 TYPE: = 8. Few states regulate the insurance industry by statute. ANSWER: F PAGE: 993 TYPE: N 9. Insurance coverage is always effective the moment an insurance broker  accepts the applicant’s first payment toward the premium. ANSWER: F PAGE: 993 TYPE: = 10. Insurance policies are governed by principles of contract law. ANSWER: T PAGE: 993 TYPE: = 11. A homeowner who insures a home for 80 percent of its value can recover  only 80 percent of the cost for damage to it, under a coinsurance clause. ANSWER: F PAGE: 994 TYPE: N 12. Under  an  incontestability  clause,  once  an  insurance   company   issues   a  policy, the insured cannot contest any statements made in the policy. ANSWER: F PAGE: 994 TYPE: N 13. An antilapse clause provides that an insurance policy will  not  lapse if no  payment is made on the date due. ANSWER: T PAGE: 994 TYPE: = 14. If a provision in an insurance policy is ambiguous, the provision will be  interpreted against the insurance company. ANSWER: T PAGE: 997 TYPE: =
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246 TEST BANK 2—UNIT ELEVEN: SPECIAL TOPICS 15. An insurance company may cancel an insured’s policy if the insured ap- pears as a witness in a case against the company. ANSWER: F PAGE: 998 TYPE: =
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CHAPTER 49: INSURANCE 247 16. Property insurance can be canceled for nonpayment of premiums. ANSWER:
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Ch49-TB2-WBL-10O¦Ã&ordf...

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