[Oct 26, 2021] Valid E05 Test Answers & E05 Exam PDF
Valid Insurance Law (M05) E05 Dumps Ensure Your Passing
NEW QUESTION 23
A breach of warranty under the general law of contract legally entitles an injured party to
- A. claim damages.
- B. avoid the contract ab initio.
- C. obtain specific performance.
- D. avoid the contract from the date of the breach.
Answer: A
NEW QUESTION 24
At what stage is insurable interest required for a marine cargo insurance policy?
- A. At inception of the policy only.
- B. Throughout the duration of the contract.
- C. At both inception of the policy and at the time of the loss.
- D. At the time of the loss only.
Answer: D
NEW QUESTION 25
Ambiguous terms in a household insurance contract are generally construed against the
- A. insurer due to the contra proferentem rule.
- B. policyholder due to the noscitur a sociis rule.
- C. policyholder due to the literal rule.
- D. insurer due to the ejusdem generis rule.
Answer: A
NEW QUESTION 26
The principle of subrogation prevents a policyholder from profiting from
- A. assigning abandonment rights to the insurer.
- B. claiming under both his insurance policy and against any negligent third party.
- C. submitting a full claim recovery under more than one insurance policy.
- D. retaining salvaged property.
Answer: B
NEW QUESTION 27
For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as
- A. an exception clause.
- B. an express term.
- C. a continuing warranty.
- D. a basis of the contract clause.
Answer: B,D
NEW QUESTION 28
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of an express term in reaching or recording an agreement?
- A. It must be evidenced in documentary form.
- B. It may be oral or in writing.
- C. It will usually override any implied term which conflicts with it.
- D. It may be implied by conduct.
Answer: B,C
NEW QUESTION 29
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?
- A. Reduce the claim amount in proportion to the premium it would have charged.
- B. Reject the claim, but maintain the policy.
- C. Avoid the contract, refuse all claims and keep the premium.
- D. Apply any terms it would have applied if the misrepresentation had not taken place.
Answer: A,D
NEW QUESTION 30
A married couple have equal shares in a property and are insured under a buildings insurance policy. What is the likely position in law of a breach of good faith by one party, which was unknown to the other party?
- A. Cover would be maintained in full for the innocent party as the cover is likely to be a joint policy
- B. Cover would be maintained in full for the innocent party as the cover is likely to be a composite policy.
- C. Cover for both parties would be invalidated as the cover is likely to be a joint policy.
- D. Cover for both parties would be invalidated as the cover is likely to be a composite policy.
Answer: C
NEW QUESTION 31
A household insurance policyholder leaves his home to go to work without setting the burglar alarm. Whilst he was out, his new tumble dryer overheats and causes fire damage to the kitchen. In what circumstances may the insurer legally reject a fire claim?
- A. If the tumble dryer is covered by extended warranty insurance.
- B. If the policyholder exaggerates the value of the claim.
- C. If there is a subrogation action against the manufacturer of the tumble dryer.
- D. If there is a breach of a warranty requiring the burglar alarm to be set.
Answer: B
NEW QUESTION 32
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?
- A. Legislation.
- B. International treaties.
- C. Case law.
- D. Official law reports.
Answer: A,C
NEW QUESTION 33
What are the main objectives of the principle of insurable interest?
- A. To reduce physical hazard and to discourage profiteering.
- B. To reduce moral hazard and to discourage wagering.
- C. To reduce physical hazard and to discourage wagering.
- D. To reduce moral hazard and to discourage profiteering.
Answer: B
NEW QUESTION 34
What is the most common for of corporation?
- A. Registered corporation.
- B. Statutory corporation.
- C. Chartered corporation.
- D. Corporation sole.
Answer: A
NEW QUESTION 35
Who is entitled to the surplus if a subrogation recovery from a negligent third party is greater than the amount the insurer has paid to the insured?
- A. It is shared between the insurer and the insured.
- B. The State
- C. The insurer only.
- D. The insured only.
Answer: D
NEW QUESTION 36
Tim is a local insurance broker. He has authority to receive premiums for a personal lines insurer and earns commission from the insurer for sales. Paul, an elderly customer, asked Tim for advice regarding his personal insurance requirements and to assist with completing the proposal form for household insurance. In these circumstances, who, if anyone, is Tim's principal?
- A. Both the insurer and Paul at different times.
- B. Paul as it is a consumer contract.
- C. No one as Tim is not a party to the insurance contract.
- D. The insurer at all times.
Answer: D
NEW QUESTION 37
For this question more than 1 option is correct. You must select all the correct options to gain the mark. Which special defences are available to the fort of libel?
- A. Necessity.
- B. Prescription.
- C. Privilege.
- D. Statutory authority.
- E. Honest opinion.
Answer: C,E
NEW QUESTION 38
A property policy contains a condition regarding prompt loss notification. If the insured fails to comply with this condition, in practice, the insurer is likely to
- A. settle the claim and recover its outlay from the insured.
- B. settle the claim and cancel the insurance policy from inception.
- C. only avoid the claim if the delay has seriously prejudiced its investigation and handling of the claim.
- D. avoid the claim automatically due to the breach of the policy condition.
Answer: D
NEW QUESTION 39
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was innocent.
- B. the premium was paid by monthly installments.
- C. no claim had been submitted or paid.
- D. the misrepresentation was fraudulent.
Answer: A
NEW QUESTION 40
How can an agency relationship be best described?
- A. A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.
- B. A person has ratified another party's action.
- C. A person has transferred his obligations under a contract to another party.
- D. A person has the authority to act on behalf of another party.
Answer: D
NEW QUESTION 41
Within what time period, from the date when the damage first began, does the owner of an office block have a right to sue the builder for negligent construction work?
- A. 15 years.
- B. 3 years.
- C. 6 years.
- D. 9 years.
Answer: B
NEW QUESTION 42
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?
- A. When fraud or arson by the insured is suspected.
- B. Upon the request of any person(s) interested in the buildings.
- C. Where the building was destroyed by an explosion.
- D. Where there is underinsurance.
Answer: A,B
NEW QUESTION 43
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