A Wants to Buy a Building to Use as a Warehouse.A

question 32

Multiple Choice

A wants to buy a building to use as a warehouse.A has seen the building he wants to buy and knows the purchase price is $500 000.00.A calls his agent and tells him he wants immediate insurance on the building.He gives him all the particulars and tells him to insure the building for $500 000.00,which the agent proceeds to do.After a month of negotiations,A finally enters into an agreement of purchase and sale,and two weeks later he becomes the owner of the building.A half a year later,the building is badly damaged by fire.In this case

• A)A has no coverage under the policy because it is void,since A had no insurable interest in the building at the time the insurance policy was taken.
• B)A has no coverage for damage caused by fire because he did not comply with the disclosure requirements of the insurance company.
• C)A's coverage under the policy began when A became the owner of the building,and the insurance company will pay for the damage to the building.
• D)A's coverage under the policy began when A entered into the agreement of purchase and sale for the building,and the insurance company will pay for the damage to the building.
• E)A's coverage under the policy began when he called his agent,and the insurance company will pay for the damage to the building.

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Definitions:

Self-fulfilling Prophecy

A belief or expectation that an individual or group holds about a future event that manifests because the individual or group acts in ways that support the belief or expectation.

Theory X

A management assumption that employees are inherently lazy, require close supervision and control, and are motivated primarily by financial incentives.

Theory Y

A management approach based on the belief that employees are intrinsically motivated and will seek out responsibility and development if given the opportunity.

Self-fulfilling Prophecies

Situations where an initially false expectation leads to its own confirmation because the expectation influences behavior to make it true.