Insurance and Contract Principles

Front

What is the role of an appraisal clause in an insurance contract?

Back

To specify that the owner agrees to obtain an appraisal in case of a dispute

Front

What is the main reason appraisers look at comparable homes in the area during a home appraisal?

Back

To estimate the home's value based on similar properties

Front

What is a potential consequence if a home appraisal comes in too low compared to the agreed purchase price?

Back

The buyer may need to pay the difference out of pocket

Front

What is the primary purpose of an other insurance provision in an insurance policy?

Back

To specify how coverage will be apportioned if multiple policies cover the same risk

Front

Which of the following best describes subrogation in the context of insurance?

Back

The legal right of insurers to pursue a third party that caused an insurance loss to the insured

Front

What is the role of primary insurance in the context of an other insurance clause?

Back

It is the first coverage that will come into effect when the policyholder suffers an insured loss

Front

How does subrogation benefit the insured party?

Back

It allows the insured to receive payments more quickly

Front

What is a waiver of subrogation?

Back

A contractual provision where an insured waives the right of their insurance carrier to seek compensation from a negligent third party

Front

In which type of insurance policy is subrogation most commonly found?

Back

Auto insurance

Front

What happens if a settlement occurs outside of the normal subrogation process?

Back

It is often legally impossible for the insurer to pursue subrogation against the at-fault party