Which of the Following Statements Regarding Section II Coverage Under

question 20

Multiple Choice

Which of the following statements regarding Section II coverage under the Homeowners 3 policy is true?

• A)Medical payments to others are covered regardless of whether the insured is legally liable.
• B)Legal defense costs incurred by the insurer to defend the insured reduce the per-occurrence limit of liability available.
• C)The insurer is not required to defend the insured against a groundless,false,or fraudulent lawsuit.
• D)Any amount paid under medical payments coverage reduces the personal liability limit available for the same claim.

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Definitions:

Net Price Method

The net price method accounts for purchases after subtracting discounts, essentially calculating the actual price paid for goods or services after all reductions.

Purchase Discounts Lost

The extra cost incurred by a company for not taking advantage of the discounts offered by suppliers for early payments.

Catalog Price

The price of an item as listed in a catalog, which may be subject to discounts based on various sales promotion strategies.

Perpetual Inventory System

An accounting method where goods are recorded as sold immediately through the use of computer systems, providing a continuous record of inventory.