When an Insurance Policy Is Ambiguous, the Policy Is Interpreted

question 43

Multiple Choice

When an insurance policy is ambiguous, the policy is interpreted:

• A) against the insurer.
• B) in favor of the insurer.
• C) according to the dictionary meaning of the words.
• D) according to the meaning of the words in the insurance industry.

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Definitions:

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in price.

Unitary Elastic

A situation where the percentage change in quantity demanded is equal to the percentage change in price, indicating a proportional relationship.

Video Games

Electronic games that involve user interaction with a user interface to generate visual feedback on a two- or three-dimensional video display device such as a TV screen, computer monitor, or handheld device.

Inferior Good

A type of good whose demand decreases as the consumer's income increases, contrasting with normal goods where demand increases with income.