Which of the Following Statements Is True About Cancellation of an Insurance

question 31

Multiple Choice

Which of the following statements is true about cancellation of an insurance policy?

• A) Insurers can cancel insurance contracts by surrendering the policy to the insured.
• B) Insurance contracts contain a reinstatement clause that allows an insured to reinstate a cancelled policy.
• C) Insureds who terminate a contract are entitled to a return of the premium on a short-rate basis.
• D) Insurers that cancel a contract need not return the unearned portion of any premiums paid by the insured.

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Definitions:

Inventory

The complete list of items such as property, goods in stock, or the contents of a building.

Irregulars

Products that have minor faults or variations from standard specifications, often sold at reduced prices due to these imperfections.

Production Overruns

Occurrences when more units of a product are produced than were originally ordered or forecasted, often leading to excess inventory.

Service Retailer

A business that sells services rather than physical goods, providing intangible products to customers.