Moh fund - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) 1) Which of the following statements describes how losses will be settled if a property insurance policy is written on a replacement cost basis? A) The policy is converted to a valued policy. B) Losses are settled without a deduction for depreciation. C) The insurer must replace the damaged or destroyed property in lieu of a cash settlement. D) Losses are settled without the applicable deductible. 2) 2) Janice purchased a living room set for $1,000 and insured this furniture on an actual cash value basis. Two years later the living room set was destroyed by a covered peril. At the time of loss, the property had depreciated in value by 25 percent. The replacement cost of the furniture at the time of loss was $1,200. Assuming no deductible, how much will Janice receive from her insurer? A) $1,200 B) $900 C) $1,000 D) $950 3) 3) Dave is an agent for Easy Pay Insurance. Easy Pay insures only the highest - quality applicants. Dave wanted to earn more commissions, so he sold some policies to applicants he knew were below - average risks. When these policyowners started filing claims, Easy Pay tried to deny the claims stating that Dave had not acted appropriately. Which general rule of agency makes Easy Pay responsible for the claims of the higher - than - average risk policyowners? A) An agent must have authority to represent the principal. B) Agents should be compensated based on the quality of the business they generate. C) A principal is legally responsible for the acts of agents acting within the scope of employment. D) There is no presumption of an agency relationship. 4) 4) All of the following statements about the rules governing agency relationships are true EXCEPT A) The principal is responsible for the acts of agents only if the acts are criminal. B) Knowledge of the agent is presumed to be knowledge of the principal with respect to matters within the scope of the agency relationship. C) An agent must be authorized to act on behalf of a principal. D) An agency agreement may grant certain powers to the agent as well as denying the agent other powers. 1
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5) 5) Why does the insured get the benefit of the doubt if an insurance policy contains any ambiguities or uncertainties? A) because insurance contracts are contracts of adhesion B) because insurance contracts are conditional C) because insurance contracts are aleatory D) because insurance contracts are unilateral 6) 6) Under which of the following rules is actual cash value determined by taking into consideration all relevant factors an expert would use to determine the value of the property? A) the broad evidence rule
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This note was uploaded on 03/21/2011 for the course ECON 202085 taught by Professor Mohammad during the Spring '11 term at University of Jordan.

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Moh fund - Exam Name MULTIPLE CHOICE Choose the one...

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