Question

True or False with explanation
Determine and briefly explain whether the following statements about offer and acceptance

for insurance contracts is true.
11. In property and liability insurance, agents typically have the authority to bind coverage.

12. In life insurance, the agent can usually accept an offer by immediately binding coverage.

13. In property insurance, the offer and acceptance are usually in writing but may be oral.

14. In life insurance, the offer is merely the promise to pay the first premium.

Answer 1

11. True. In property and Liability insurance, agents typically have the authority to bind coverage. Agents in property and liabilty insurance has the right to accept the insured's offer for binding the coverage as soon as possible. So this statement is true.

12. False. In Life insurance, the agent can't usually accept an offer by immediately binding coverage. Agents in Life insurance can't immediately accept the offer for binding the coverage before the detailed examination of applications by the insurer. Immediate coverage binding is only applicable in general insurance not in life insurance.

13. True. In property insurance, the offer and acceptance are usually in writing but may be oral. Insurance is usually the contract between insurer and the insured. It is mainly the valid acceptance between two parties. And in property insurance the offer and acceptance are usually in writing but sometimes may be oral.

14. False. It is false that in life insurance, completing the application and paying the first premium constitute the acceptance of the offer from the insurer. The offer is not merely the promise to pay the first premium in Life insurance.