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CII E05 - Examination element of M05 Insurance law

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Total 50 questions

A household insurance policyholder leaves his home to go to work without setting the burglar alarm. Whilst he was out, his new tumble dryer overheats and causes fire damage to the kitchen. In what circumstances may the insurer legally reject a fire claim?

A.

If there is a subrogation action against the manufacturer of the tumble dryer.

B.

If the policyholder exaggerates the value of the claim.

C.

If there is a breach of a warranty requiring the burglar alarm to be set.

D.

If the tumble dryer is covered by extended warranty insurance.

At what stage is insurable interest required for a marine cargo insurance policy?

A.

At the time of the loss only.

B.

Throughout the duration of the contract.

C.

At inception of the policy only.

D.

At both inception of the policy and at the time of the loss.

Why may an insurer insert a continuing warranty into an insurance policy?

A.

To ensure that underinsurance is avoided at all times.

B.

To enable an insurer to charge an additional premium if the warranty is continually breached.

C.

To maintain the annual aggregate limit of liability throughout the policy period.

D.

To encourage good risk management by the insured throughout the policy period.

What are the main objectives of the principle of insurable interest?

A.

To reduce moral hazard and to discourage profiteering.

B.

To reduce physical hazard and to discourage profiteering.

C.

To reduce physical hazard and to discourage wagering.

D.

To reduce moral hazard and to discourage wagering.

Two liability policies with different insurers cover the same loss of £15,000,000. The limit of liability is £10,000,000 under policy X and £20,000,000 under policy Y. Neither policy has a non-contribution clause. What amount will policy Y contribute towards the claim payment?

A.

£5,000,000

B.

£7,500,000

C.

£9,000,000

D.

£10,000,000