In What Circumstances Can an Insurer Cancel an Insurance Policy

question 45

Multiple Choice

In what circumstances can an insurer cancel an insurance policy?

• A)If the insured has breached their duty of good faith.
• B)If the insured has breached a term of the contract.
• C)If the insured has made a fraudulent claim.
• D)All of the above.

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Definitions:

Indemnity

A security or protection against a financial liability or loss.

Disability Insurance

A type of insurance policy providing income in the event a worker is unable to perform their job due to disability.

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Mutual Consideration

The reciprocal exchange of value or promises within a contract, where each party agrees to give up something in return for receiving something else of value.