Question 1

Which of the following statements is true regarding insurance?

Accepted Answer

All the statements provided are correct regarding insurance. An insurance contract is indeed referred to as a policy, the payment made to the insurer is known as a premium, and the insurance company can be referred to as the underwriter.

Question 2

Describe in detail what takes place at a real estate closing. What are closing costs?

Accepted Answer

The answer of Describe in detail what takes place at...

Question 3

Describe the role of the escrow agent in the sale of real property.

Accepted Answer

The answer of Describe the role of the escrow agent...

Question 4

What is an insurable interest? When does a person have an insurable interest?

Accepted Answer

The answer of What is an insurable interest? When does...

Question 5

A(n)______ clause in an insurance policy provides that if the parties cannot agree on the amount of a loss covered under the policy or the value of the property lost, an estimate by an impartial and qualified third party can be demanded.

Accepted Answer

An appraisal clause in an insurance policy allows for an impartial and qualified third party to estimate the value of the property lost or the amount of a covered loss when the insurer and insured cannot agree on these amounts.

Question 6

Which of the following is not a defense against paying a claim that an insurer could raise?

Accepted Answer

The insurer cannot use the insured's good faith as a defense against paying a claim. Good faith (acting honestly and with no intention to deceive) is expected from both parties in an insurance contract, and acting in good faith is not a valid reason for an insurer to deny a claim.

Question 7

_______is the right to pursue another party's claim.

Accepted Answer

Subrogation is the legal right that allows one party (usually an insurance company) to make a payment that is actually owed by another party and then collect the money from the party that owes the debt after the fact.

Question 8

What is a lease of real property? Describe how leases of commercial property might differ from leases of residential property.

Accepted Answer

The answer of What is a lease of real property?...

Question 9

Describe the coverage of the following classifications of insurance: automobile insurance, group insurance, homeowners' insurance, key-person insurance, and title insurance.

Accepted Answer

The answer of Describe the coverage of the following classifications...

Question 10

An_______ is an interest either in a person's life or well-being or in property that is sufficiently substantial to justify insuring against injury to or death of the person or damage to the property.

Accepted Answer

An insurable interest is a requirement for initiating an insurance policy. It means the policyholder must have a stake in the safety and well-being of the person or property insured, such that they would suffer a financial or personal loss if harm came to the insured entity.

Question 11

When a policy provides insurance against third-party claims, the insurer is obligated to make reasonable efforts to settle such a claim. If a settlement cannot be reached, then regardless of the claim's merit, the insurer must _______any suit against the insured.

Accepted Answer

The insurer must defend any suit against the insured, as part of their obligation under a liability insurance policy, even if the claim is without merit.

Question 12

List and define the four types of concurrent property ownership described in the text.

Accepted Answer

The answer of List and define the four types of...

Question 13

What do the terms indemnity and subrogation mean in the context of insurance policies?

Accepted Answer

The answer of What do the terms indemnity and subrogation...

Question 14

A(n)_____ clause in an insurance policy provides that after a policy has been in force for a specified length of time, usually two or three years, the insurer cannot contest statements made in the application.

Accepted Answer

The incontestability clause in an insurance policy ensures that after the policy has been active for a predetermined period, typically two or three years, the insurer cannot dispute the claims or statements made in the application. This clause is designed to provide certainty and security to the policyholder.

Question 15

List and define the steps involved in the sale of real estate.

Accepted Answer

The answer of List and define the steps involved in...

Question 16

A person seeking insurance from an insurance company's agent will usually be protected under which of the following circumstances?

Accepted Answer

The person seeking insurance is usually protected when the application is made and when a premium has been paid, as these actions often initiate temporary coverage or bind the insurer to the terms discussed until the formal policy is issued.

Question 17

Typically, in fire insurance policies, a ______clause provides that if owners insure the
Property up to a specified percentage of its replacement value-usually 80 percent-they will be fully reimbursed for any loss.

Accepted Answer

The correct term is "coinsurance." In fire insurance, a coinsurance clause requires policyholders to insure their property to a specified percentage of its value (often 80%) to receive full compensation for any loss. This encourages policyholders to insure their property adequately.

Question 18

The term_______ refers to a duty to make good on any loss, damage, or liability claims
Incurred by another.

Accepted Answer

The term "indemnity" refers to a contractual obligation of one party to compensate the loss incurred by the other party.

Question 19

What might result if an insurance applicant makes false statements in an insurance application?

Accepted Answer

The answer of What might result if an insurance applicant...

Question 20

What is an incontestability clause? What is an arbitration clause? What is a multiple insurance policies clause?

Accepted Answer

The answer of What is an incontestability clause? What is...

Quiz 16: Real Property and Insurance Law