Which of the Following Statements Regarding the Coverage E Limit

question 18

Multiple Choice

Which of the following statements regarding the Coverage E limit in the homeowners policy is true?

• A)It is an aggregate limit,and once the amount paid for one or more claims reaches the limit,no additional coverage is provided.
• B)The limit applies only if a court orders the insured to pay-there is no coverage for settlements reached out-of-court.
• C)Any legal defense costs incurred by the insurer are counted against the limit of liability.
• D)The limit applies on a per-occurrence basis to bodily injury and property damage liability.

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Definitions:

Par Value

The face value of a bond or stock, as stated by its issuer, which is the nominal value and does not necessarily reflect its market value.

Conversion Value

The value of a convertible security if it is converted into a specified number of shares of the issuing company.

Common Stock

Equity ownership in a corporation, with voting rights and the potential for dividends and capital appreciation.

Strike Price

The set price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying asset.