General Insurance
What makes an insurance policy aleatory?
Answer and explanation
Answer: C. An aleatory contract is one in which the values exchanged may be unequal, since a small premium may produce a large benefit or none at all depending on whether the insured event occurs. Drafting describes adhesion, cancellation describes the unilateral character, and coverage of a named person describes a personal contract.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, aleatory contract
More general insurance questions
- Why is a life insurance policy described as unilateral?
- Why is an insurance contract classified as a conditional contract?
- Why is an insurance policy a contract of adhesion?
- A business installs sprinklers throughout its warehouse. Which method of handling risk is that?
- A firm raises the deductible on its cover and keeps the first layer of loss itself. Which method of handling risk is that?
- A homeowner stores petrol in an attached garage. In risk terms, what is the petrol?
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