#1
Which of the following is a fundamental principle of insurance contract law?
Principle of Indemnity
ExplanationInsured cannot profit from a claim; reimbursement for actual loss.
#2
Which principle dictates that an insurance contract must be based on the utmost good faith?
Principle of Utmost Good Faith
ExplanationContract requires full and honest disclosure.
#3
Which principle allows multiple insurers to share the cost of a claim in proportion to their coverage?
Principle of Contribution
ExplanationMultiple insurers contribute to claim costs.
#4
Which principle dictates that an insured cannot claim more than the actual loss suffered?
Principle of Indemnity
ExplanationInsurance covers actual loss only.
#5
What is 'Underwriting' in insurance contract law?
The process of assessing risk and setting premiums
ExplanationEvaluating risk and determining premiums.
#6
What does the 'Utmost Good Faith' principle imply in insurance contract law?
Insurers must disclose all material facts
ExplanationInsurers must provide complete information.
#7
What is the 'Doctrine of Subrogation' in insurance contract law?
Insurer can recover from third parties the amount it has paid to the insured
ExplanationInsurer's right to seek reimbursement from third parties.
#8
What is the purpose of the 'Principle of Insurable Interest' in insurance contract law?
To ensure the policyholder has a financial interest in the insured property
ExplanationPolicyholder must have a financial stake.
#9
What does 'Adhesion Contract' mean in the context of insurance law?
A contract where one party dictates the terms and the other party accepts them
ExplanationStandardized contract terms set by one party.
#10
What is the 'Duty of Disclosure' in insurance contract law?
The requirement for the insured to disclose all relevant information to the insurer
ExplanationInsured must provide all pertinent information.
#11
In insurance contract law, what does the 'Doctrine of Uberrimae Fidei' refer to?
Doctrine of Utmost Good Faith
ExplanationLatin term for 'utmost good faith'.