Which of the Following Was the Result on Appeal in Equity

question 67

Multiple Choice

Which of the following was the result on appeal in Equity Fire & Casualty Company v. Laurence Traver, the case in the text in which an insured on a policy of automobile insurance mailed a premium to the insurer, but it did not reach the insurer prior to the expiration date of the policy; and the insurer refused to provide coverage for a motor vehicle accident that occurred after the expiration date of the policy and before the premium was received?

• A) The court ruled that coverage was required under the policy because of the mailbox rule.
• B) The court ruled that coverage was not required under the policy because of the mailbox rule.
• C) The court ruled that coverage was not required under the policy because the insured did not meet his obligation of seeing that the premium amount was received by the insurer in a timely manner.
• D) The court ruled that coverage was required because the insured had a grace period of 7 days in order for the payment to arrive.
• E) The court ruled that under the unique facts of the case, there was acceptance of the renewal offer preventing a lapse of the policy.

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Definitions:

Plantwide Overhead Rate

A single overhead rate calculated by dividing total factory overhead by the total base units used by all products, applied throughout the entire manufacturing plant.

Overhead Allocation Base

A measure or factor used to distribute overhead costs to products or services, such as machine hours or labor costs.

Machine Hours

A metric used in manufacturing to allocate costs based on the number of hours a machine is operated.

Indirect Labor

Labor costs of employees who do not directly work on a product, but whose services are necessary for the manufacturing process.