Question

1. while it provides considerable coverage, a property and casualty insurance policy will not pay benefits unless specific actions defined in the policy are taken by the policyholder when submitting a claim, due to the fact that the policy is a(n):

○ a. aleatory contract
○ b. conditional contract
○ c. contract of adhesion
○ d. unilateral contract

1. which of the following correctly identifies three elements that must be present to create an enforceable contract?

○ a. acceptance, consideration, and offer
○ b. consideration, offer, and written documentation
○ c. offer, written documentation, and acceptance
○ d. written document, acceptance, and consideration

1. by limiting an insurers catastrophic losses at a certain pre - determined level, reinsurance affects the insurers policyholders by

○ a. facilitating faster payments on claims
○ b. reducing payments on claims
○ c. reducing the insurers chances of insolvency following a catastrophic loss

Explanation:

1. A conditional contract requires specific actions (conditions) for benefits. Here, policyholder actions are conditions.
2. An enforceable contract needs offer (proposal), acceptance (agreement), and consideration (something of value exchanged).
3. Reinsurance limits insurer losses, thus reducing insolvency risk after catastrophes, protecting policyholders.

Answer:

1. B. conditional contract
2. A. acceptance, consideration, and offer
3. C. reducing the insurer's chances of insolvency following a catastrophic loss