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How is insurance company able to protect such a large number of people who could potentially suffer a loss?
Insurance redistrubutes the finacial consequences of individual losses to all persons insured.
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Define accidental bodily injury.
Is an unforeseen and unintented injury that resulted from an accident rather than a sickness.
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What is a contract and what is the purpose?
- They are written agreements that are legally enforceable by law.
- It is the instrument through which this transfer of risk is accomplished in the insurance policy.
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Decribe the concept of consideration on the part of an insured and how it differs from consideration on the part of an insurer.
- Consideration is something of value that each party gives to the other.
- The Part of the insured is the payment of premium and the representations made in application.
- The Part of the insurer is the promise to pay in the event of loss.
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What does representation mean and how does it differ form a warranty?
they arey statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true.
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If the insured intentionally answeres any questions on the application for insurance untruthfully, and the information is material to the insurance, what type of statements are these? Can they void the contract?
misrepresentations.Yes
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Who generally fills out the application?
applicant
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Who is required to sign the application?
The agent, the applicant, and proposed insured
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What is an attending physician's statement and when is it required?
it is a statement of the proposed insureds physical body.during the underwriting process.
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How can an insurance company use the information it obtains from the Medical Information Bureau?
it is a review of the past medical history of the proposed insured
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What is the purpose of the Fair Credit Reporting Act?
to protect the consumers against the circulation of the inaccurate, information.
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What is the difference between a consumer report and an investigative consumer report?
- consumer report- include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
- investigative consumer reports are simular to consumer reports, except they obtain their information through an investigation and interviews with associates,friends, and neighbors of the consumer
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What must the producer do if the premium doesnt accompany the application?
give them a conditional receipt and collect the premium whenever they go and deliver the policy
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Who is responsible for delivering the policy to the insured and collecting the premium?
the agent
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