BU353 Study Guide - Final Guide: Life Insurance, Vehicle Insurance, Absolute Liability
BU353 Final Exam Review Questions
1. There are four elements that must exist for a negligence suit to be successful. Describe
these four elements.
a) Legal duty - ex. Legal duty to stop at a traffic light
b) Breach of duty - what a reasonable person would have done
c) Proximate cause - foreseeability; injury occurred due to the defedat’s atios
d) Injury to plaintiff - must have suffered a loss
2. What is meant by the absolute liability law provision of the automobile policy? Who is
protected under this provision?
The liaility of a rogdoer’s autooile isurae opay to pay soeoe hared y the
wrongdoer, even if the wrongdoer has violated the terms of the insurance policy, for example, by
driving with an expired license. This is subject to a limit, usually $200,000, and the requirement that
the wrongdoer is in violation of the contract must reimburse the insurer.
3. What coverages are provided under Section I and Section II of the Homeowners
Policy?
a) Section I – Property Coverages
Coverage A: Dwelling Building – Homeowner
Coverage B: Detached Private Structures (Homeowner only) - playground, shed, pool house
Coverage C: Personal Property - property you own, wear or use on premises
Coverage D: Additional Living Expenses
b) Section II – Liability Coverages
4. What tax benefits are provided by permanent life insurance policies?
Permanent life insurance is when the sum assured is due to be paid out at the end of the policy and
the policy accrues a cash value. The tax benefits are as follows:
- death benefits are not taxed
- no income tax paid on increases in cash value when the policy is in force
- if insured dies, returns are not taxed; if insured lives, tax is deferred until funds are received
find more resources at oneclass.com
find more resources at oneclass.com
