An insurance contract which specifies that the insurer pay apreset amount upon the happening of...

An insurance contract which specifies that the insurer pay a preset amount upon the happening of some contingency is called:

A. a valued contract.

B. an indemnity contract.

C. a coinsurance contract.

D. an insurance-to-value contract.

Expert Solution

A. a valued contract

A valued contract is an insurance policy in which the insurer is obligated to pay a pre-specified amount to the insured in the event of a loss, regardless of the actual value of the loss. The pre-specified amount for valued contracts is typically the full value of the policy.

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