Question
In: Finance
Explain 1) the consequence of the insured having a material misrepresentation on an insurance application, and...
Explain 1) the consequence of the insured having a material misrepresentation on an insurance application, and 2) the consequence for an insurance company of the insurance contract being a contract of adhesion.
Solutions
Expert Solution
1) Misrepresentation is getting into a contract with a person or a company on false grounds by making statements that are not in accordance with the facts. The consequence of the insured having a material misrepresentation on an insurance application gives insurance company a right to deny the claim or terminate the policy.
2) Insurance contracts are considered as the contracts of adhesion. This means that the applicant adheres to the terms of the contract decided by the insurer if he/she accepts the application. So, the consequence for an insurance company of the insurance contract being a contract of adhesion is that any confusing language in such contracts are interpreted in favor of the insured.
jeff jeffy answered 2 years agoRelated Solutions
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insurance premiums:
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Monthly Auto Insurance Premium
5
$64
2
$87
12
$50
9
$71
15
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6
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25
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16
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A random sample of eight drivers insured with a company and having similar auto insurance policies...
A random sample of eight drivers insured with a company and
having similar auto insurance policies was selected. The following
table lists their driving experiences (in years) and monthly auto
insurance premiums.
Driving Experience (years)
Monthly Auto Insurance Premium $
5
64
2
87
12
50
9
71
15
44
6
56
25
42
16
60
a. Does the insurance premium depend on the driving experience
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1. A random sample of eight auto drivers insured with a company and having similar auto...
1. A random sample of eight auto drivers insured with a company
and having similar auto insurance policies was selected. The
following table lists their driving experience (in years) and the
monthly auto insurance premium (in dollars).
Driving Experience
5
2
12
9
15
6
25
16
Monthly Auto Insurance Premium ($)
64
87
50
71
44
56
42
60
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employ underwriters to calculate the risk of specific insurance
policies.
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