In the Course of a Claims Investigation,the Insurer Discovers That

question 35

Multiple Choice

In the course of a claims investigation,the insurer discovers that the warehouse it covers has been used for dynamite storage for the last year. When the policy was first issued four years ago,the insurer agreed to cover it for clothing storage. What does the law typically allow the insurer to do in this situation?

• A)Pay the claim in full.
• B)Pay only a proportion of the claim
• C)Deny the claim
• D)Prosecute the insured for intentional misrepresentation

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Definitions:

Reason of Insanity

A legal defense in which a defendant argues that they should not be held criminally responsible for their actions due to mental illness at the time of the crime.

Problem in Living

A situation or issue encountered in daily life that causes distress or difficulty, which may need intervention or support to overcome.

Thomas Szasz

A psychiatrist and academic known for criticizing the moral and scientific foundations of psychiatry, particularly the concept of mental illness.

American Psychiatric Association

A professional organization of psychiatrists and psychiatric professionals dedicated to promoting mental health care, ethical practices, and the advancement of psychiatric research.