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Principles of Risk Management and Insurance

George E. Rejda, Michael McNamara

Chapter 9

FUNDAMENTAL LEGAL PRINCIPLES - all with Video Answers

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Chapter Questions

Problem 1

a. Explain the principle of indemnity.
b. How is actual cash value calculated?
c. How does the concept of actual cash value support the principle of indemnity?

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01:46

Problem 3

a. What is a valued policy? Why is it used?
b. What is a valued policy law?
c. What is a replacement cost policy?

Tristan Wille
Tristan Wille
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Problem 3

a. Explain the meaning of an insurable interest.
b. Why is an insurable interest required in every insurance contract?

Rashmi Sinha
Rashmi Sinha
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Problem 4

a. Explain the principle of subrogation.
b. Why is subrogation used?

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Problem 5

Explain the following legal doctrines:
a. Misrepresentation
b. Concealment
c. Warranty

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Problem 6

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

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01:48

Problem 7

Insurance contracts have certain legal characteristics that distinguish them from other contracts. Explain the following legal characteristics of insurance contracts.
a. Aleatory contract
b. Unilateral contract
c. Conditional contract
d. Personal contract
e. Contract of adhesion

Kaylee Mcclellan
Kaylee Mcclellan
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01:29

Problem 8

Explain the general rules of agency that govern the actions of agents and their relationship to insureds.

Alexander Cheng
Alexander Cheng
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03:38

Problem 9

Identify three sources of authority that enable an agent to bind the principal.

Oluwadamilola Ameobi
Oluwadamilola Ameobi
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Problem 10

Explain the meaning of:
a. Waiver
b. Estoppel

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