Zelig Owns a Widget Worth $25 000

question 42

Multiple Choice

Zelig owns a widget worth $25 000.He purchased property insurance from Superior Insurance Co.The widget was irreparably damaged as a result of an accident that was caused by Zoe.Zoe has a liability insurance policy from Erie Insurance Co.Which of the following statements is TRUE?

• A)Zelig cannot claim a benefit from Superior Insurance Co unless Zoe caused the accident in a way that exposed her to liability in tort.
• B)If it is required to pay a benefit of $25 000 to Zelig,Superior Insurance Co can claim the same amount of money from Erie Insurance Co even if Zoe could not be held liable to Zelig for damaging the widget.
• C)If Superior Insurance Co sues Zoe,it will do so on the basis of the concept of contribution.
• D)The concept of subrogation means that if Zelig successfully sues Zoe in tort,she will be able to claim a benefit from Superior Insurance Co.
• E)If Superior Insurance Co pays a benefit to Zelig,it will be entitled to exercise subrogated rights against Zoe.

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Definitions:

Redistribution of Income

The transfer of income from certain individuals or groups to others through mechanisms like taxes, subsidies, and social welfare programs.

Equalizing Opportunities

Efforts or policies aimed at leveling the playing field so that individuals have equal chances to succeed, regardless of their background or circumstances.

Demographic Group

A segment of the population defined by certain characteristics such as age, race, gender, or income, used in statistical analysis and marketing.

Economic Life Cycle

The different stages an individual goes through from dependence to independence, potentially to wealth accumulation, and finally to retirement and dependence once more, in terms of earning and spending.