Review Questions

    1. Explain the principle of indemnity.

    2. How is actual cash value calculated?

    3. How does the concept of actual cash value support the principle of indemnity?

    1. What is a valued policy? Why is it used?

    2. What is a valued policy law?

    3. What is a replacement cost policy?

    1. Explain the meaning of an insurable interest.

    2. Why is an insurable interest required in every insurance contract?

    1. Explain the principle of subrogation.

    2. Why is subrogation used?

  1. Explain the following legal doctrines:

    1. Misrepresentation

    2. Concealment

    3. Warranty

  2. List the four requirements that must be met to form a valid insurance contract.

  3. Insurance contracts have certain legal characteristics that distinguish them from other contracts. Explain the following legal characteristics of ...

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