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Q:
Lee obtains a $250,000 life insurance policy from Mutual Insurance Company. On Lee's death, Mutual will pay $250,000 to
a. Lee's beneficiary.
b. Lee's employer.
c. Lee's heir.
d. the state.
Q:
Sue obtains a life insurance policy with no cash surrender value and names her son Tom as the beneficiary. This is
a. casualty insurance.
b. decreasing-term life insurance.
c. health insurance.
d. term life insurance.
Q:
Edie obtains a homeowners' insurance policy with First State Insurance Company. First State can cancel the policy
a. if Edie appears as a witness in a case against First State.
b. if Edie fails to pay the premiums.
c. if Edie makes changes that add to the home's value.
d. under no circumstances.
Q:
Omega Insurance Company has a valid reason to cancel part of a policy that Omega issued to Professional Sales, Inc. In most states, Omega could effect this cancellation on
a. advance oral notice only.
b. advance written notice only.
c. advance oral or written notice.
d. neither advance oral nor written notice.
Q:
Ken obtains a property insurance policy from Loyal Insurance Company. Loyal may cancel, or refuse to renew, the policy because of
a. Ken's fraud with respect to the condition of the property only.
b. Ken's gross negligence with respect to the hazard insured against only.
c. Ken's fraud with respect to the condition of the property, or his gross negligence with respect to the hazard insured against.
d. nothing Ken does.
Q:
Allied Company obtains policies with Best-Rate Insurance, Inc., and Cover-All Corporation against the risk of loss of Allied's office building in a fire. Each policy includes a multiple-insurance clause. A fire partially destroys the building. Allied can collect from Best-Rate
a. all of the loss.
b. half of the loss.
c. its proportionate share of the loss to the total amount of insurance.
d. none of the loss.
Q:
Greg obtains from Helpful Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled. This is
a. an antilapse clause.
b. an arbitration clause.
c. an appraisal clause.
d. an incontestability clause.
Q:
Burt obtains from Capital Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy, an estimate of the value by an impartial third party can be demanded. This is
a. an antilapse clause.
b. an arbitration clause.
c. an appraisal clause.
d. an incontestability clause.
Q:
Eagle Transport Corporation wants to insure its warehouse to obtain the maximum possible recovery for the lowest possible premium. To obtain the maximum recovery under a coinsurance clause, the percentage of the value of the property that should be insured is
a. 80 percent.
b. 90 percent.
c. 100 percent.
d. 120 percent.
Q:
Rollo applies for, and obtains, a life insurance policy from Standard Insurance Company that contains an incontestability clause. This clause provides that Standard cannot contest statements made in the application
a. after the policy has been in effect for a specified period of time.
b. as soon as the policy is issued.
c. before the policy is issued.
d. under any circumstances.
Q:
Retail Stores, Inc., an applicant for a liability insurance policy, contacts Sam, an insurance broker. Sam obtains coverage for Retail Stores through Total Business Insurance, Inc. (TBI). Sam is an agent for
a. Retail Stores.
b. Sam
c. TBI.
d. Retail Stores, Sam, and TBI.
Q:
Super Shipping Corporation applies to Tropic Insurance Company for a fire insurance policy on Super's warehouse. On the application, Super misrepresents the age of the property to obtain a lower premium. When a fire destroys the warehouse, Tropic can
a. deny payment, because a fire destroyed Super's warehouse.
b. deny payment, because of Super's fraud in the application.
c. not deny payment, because a fire destroyed Super's warehouse.
d. not deny payment, because the application is not part of the policy.
Q:
B applies to City Insurance Company for insurance. City issues a policy, but later discovers that Bob's application includes several misstatements. Most likely, these misstatements can
a. affect the coverage under the policy but cannot void the policy.
b. bind Bob but cannot affect the coverage.
c. not bind Bob or affect the policy.
d. void the policy.
Q:
For Diane to obtain an insurance policy on her farm, including its crops, equipment, and livestock, she must have an insurable interest in the property that exists
a. at any time.
b. at the time a policy is obtained.
c. at the time a loss occurs.
d. continuously from the time a policy is obtained to the time a loss occurs.
Q:
Adam and Britney are partners who own and operate Chick"n Hut, a chain of fast food restaurants. Their partnership obtains insurance on Adam's and Britney's lives. This is
a. casualty insurance.
b. fidelity insurance.
c. key-person insurance.
d. liability insurance.
Q:
Gail is an accountant with the firm of Hall & Associates, which obtains insurance from Interstate Insurance Company on Gail's life. Gail dies. The proceeds of the policy belong to
a. Gail's heirs.
b. Hall & Associates.
c. Interstate Insurance.
d. the state.
Q:
Investors Commercial Property Corporation obtains an insurance policy that protects against any losses incurred as a result of existing claims against or liens on certain property at the time of its purchase. This is
a. casualty insurance.
b. fire insurance.
c. life insurance.
d. title insurance.
Q:
Standard Business Company obtains an insurance policy to protect against losses incurred by the firm as a result of being held liable for personal injuries or property damage sustained by others. This is
a. casualty insurance.
b. fire insurance.
c. life insurance.
d. title insurance.
Q:
EZ Rentals Company wants to insure the equipment that it rents to the public. To obtain insurance, EZ must have an insurable interest in the property
a. at any time.
b. at the time a loss occurs.
c. at the time a policy is obtained.
d. continuously from the time a policy is obtained to the time a loss occurs.
Q:
Regional Supplies Company insures its real and personal property, as well as the lives of its key employees, to protect its financial interest should some event undermine its security. This is
a. risk management.
b. risk pooling.
c. risky.
d. risqué.
Q:
A homeowners' policy does not cover the contents of the insured's home.
Q:
The standard fire insurance policy covers losses to the insured as a result of fire.
Q:
Term life insurance provides life insurance for a specified term with no cash surrender value.
Q:
No insurance can be canceled for nonpayment of premiums.
Q:
An insurer can cancel an insurance policy at any time for any reason.
Q:
Once an insurance policy is issued, the insured may not cancel the policy without the written permission of the insurance company.
Q:
Misrepresentation on an insurance application is a ground for canceling the policy.
Q:
Arbitration of disputes over insurance claims is often provided for in policies.
Q:
Under an antilapse clause, an insurance policy will lapse only if no premium is paid on the date due.
Q:
A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
Q:
Once an insurance agent accepts a payment from an applicant, the insurance company must issue a policy.
Q:
An insurance application is part of the insurance contract.
Q:
The states regulate the insurance industry.
Q:
A person has an insurable interest in property if he or she would sustain a pecuniary loss from the property's destruction.
Q:
A sibling may have an insurable interest in his or her sibling's life.
Q:
Insurance companies are prohibited from engaging in the practice of risk management.
Q:
Insurance is an arrangement for transferring or allocating risk.
Q:
The consideration paid to an insurer to obtain an insurance policy is the premium.
Q:
An insurance broker ordinarily works for the insurance company.
Q:
The party who pays the premiums for an insurance policy is the underwriter.
Q:
Mike owns an office building in fee simple. Can Mike transfer temporary possession of the building to New Business Corporation (NBC)? Can NBC then transfer possession for even less time to Office Cubicles, Inc.? Explain.
Q:
John owns an orchard behind Kay's house and property. The only access to the orchard is Kay's driveway, which John uses to get to his land. John sells the orchard to Lee. Can Lee use the right-of-way across Kay's property?
Q:
Fact Pattern 48-2
Excel Mall leases space to Fine Goods, Inc., and Great Stuff Company. Later, Great begins to sell items that are similar to Fine's goods, and Fine abandons its space before the end of the lease term.
Refer to Fact Pattern 48-2. According to the court's ruling in Case 3, Frenchtown Square Partnership v. Lemstone, Inc., Excel is
a. entitled to damages from Great for its sale of items similar to Fine's.
b. entitled to increase its other tenants' rent to cover Fine's unpaid rent.
c. entitled to the unpaid rent from Fine.
d. required to mitigate its damages.
Q:
Fact Pattern 48-2
Excel Mall leases space to Fine Goods, Inc., and Great Stuff Company. Later, Great begins to sell items that are similar to Fine's goods, and Fine abandons its space before the end of the lease term.
Refer to Fact Pattern 48-2. According to the court's opinion in Case 3, Frenchtown Square Partnership v. Lemstone, Inc., Fine is liable to
a. Excel and Great for creating a dispute over Great's business decision.
b. Excel for the unpaid rent.
c. Excel's tenants, except Great, for abandoning Fine's mall space.
d. neither Excel nor its tenants.
Q:
Fact Pattern 48-1
Lily rents an apartment from Metro View Properties, Inc. The lease ends on May 31.
Refer to Fact Pattern 48-1. If the lease includes an option for renewal and Lily decides to exercise the option, but does not comply with a clause requiring notice to Metro, on June 1, Lily has
a. an implied option to renew the term.
b. a right to remain contingent on her notice to Metro.
c. a right to remain subject to notice from Metro.
d. no right to remain.
Q:
Fact Pattern 48-1
Lily rents an apartment from Metro View Properties, Inc. The lease ends on May 31.
Refer to Fact Pattern 48-1. If the lease includes an option for renewal but Lily decides not to exercise the option, on June 1, Lily has
a. an implied option to renew the term.
b. a right to remain contingent on her notice to Metro.
c. a right to remain subject to notice from Metro.
d. no right to remain.
Q:
Fact Pattern 48-1
Lily rents an apartment from Metro View Properties, Inc. The lease ends on May 31.
Refer to Fact Pattern 48-1. If the lease does not include an option for renewal, and Lily and Metro do not agree that Lily can stay on at the end of the term, on June 1, Lily has
a. an implied option to renew the term.
b. a right to remain contingent on her notice to Metro.
c. a right to remain subject to notice from Metro.
d. no right to remain.
Q:
Britney leases an apartment from Chris for one year. After two months, she sublets the premises six months to Dina, without obtaining Chris's consent. Dina pays the rent for only four months. For the last two months, Britney is
a. liable for the rent, because Dina defaulted.
b. liable for the rent, because the sublease lacked Chris's consent.
c. not liable for the rent, because Britney does not own the apartment.
d. not liable for the rent, because Britney sublet the premises to Dina.
Q:
Residential Property Corporation (RPC) owns apartment buildings. Sue leases one of RPC's apartments. Sue's transfer of her interest in the lease to Tony for a period shorter than the lease term is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Q:
Residential Investments Corporation owns several apartment buildings in two states. Regarding standards for the maintenance of the buildings, Residential should consult
a. the appropriate city ordinances and state statutes.
b. the appropriate city statutes only.
c. the appropriate state statutes only.
d. the Uniform Landlords Maintenance Manual.
Q:
Dave rents a house to Edie, subject to the storage of some of his belongings in the house for "a couple of weeks." Two months later, the belongings are still there, Dave refuses to remove them, and Edie continues to pay the full amount of the rent for less than the full use of the house. Edie may
a. protest to Dave only.
b. stop paying the rent or sue for damages or possession only.
c. stop paying the rent, sue for damages or possession, or terminate the lease.
d. terminate the lease only.
Q:
Consumer Stores, Inc., signs a lease for a storefront owned by Downtown Property Company. Unlike a purchaser of real property, Consumer Stores
a. acquires only temporary possession of the premises.
b. enjoys exclusive possession of the premises.
c. holds only temporary title to the premises.
d. retains temporary, exclusive possession and title to the premises.
Q:
A-Plus Properties, Inc., sells a city block to Business Park Corporation, subject to a limitation on the height of any building built on the property and a declaration that Business Park's successors are bound to this limit. This is
a. adverse possession.
b. an easement.
c. a restrictive covenant.
d. a special warranty deed.
Q:
To acquire the ownership of a mountain cabin by adverse possession, Cody must occupy the cabin exclusively, continuously, and peaceably for a specified period of time
a. in an, open, hostile, and adverse manner.
b. until the owner files a suit.
c. without the owner's knowledge.
d. with the state's permission.
Q:
Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants only that Opal held good title during her ownership of the property. This deed is
a. a grant deed.
b. a quitclaim deed.
c. a special warranty deed.
d. a warranty deed.
Q:
Mineral Products Corporation, which owns no land, has a right to mine the copper from Natural Resource Company's land. Mineral's right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Q:
With respect to Alan's land, Bob has an easement, Carol has a profit, and Don has a license. A right to possess the land is owned by
a. Alan, Bob, and Carol only.
b. Alan and Don only.
c. Alan only.
d. Bob, Carol, and Don only.
Q:
Timber Products Company (TPC) has a right to remove from the property of Union Lumber Company all of the sawdust that TPC can use. This right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Q:
Rural Products Company (RPC) possesses farmland. RPC has the right to use the property, including harvesting the crops, for ten years. RPC does not have the right to extract the coal under the land. This is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. an easement.
Q:
Pete possesses a parcel of land. Pete has the right to use the property, including extracting gold from the land through an existing mine, for life. Pete also has the right to lease the land for a period not to exceed his life. This ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
Q:
Beth owns a corporate office park in Ohio. Her ownership rights include the right to sell or give away the property without restriction, as well as the right to commit waste, if she chooses. Beth's ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
Q:
Kay possesses a city block in Los Angeles. Kay has the right to use the property, as she sees fit, subject to local laws. Kay can lease the property, or dispose of it by selling or giving it away or letting it pass on her death to her heirs. This ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
Q:
Even after a tenant sublets leased premises, the tenant may be obligated to pay rent.
Q:
A tenant has a duty to maintain in a reasonably safe condition those areas under his or her control.
Q:
The implied warranty of habitability does not apply to major physical defects.
Q:
Generally, a tenant must pay agreed-to rent even if the tenant moves out as long as the move is unjustifiable and the lease is in force.
Q:
A tenant is not responsible for the ordinary wear and tear of leased premises.
Q:
A tenant is not responsible for any damage to leased premises.
Q:
Generally, the law applies contract doctrines to the landlord-tenant relationship.
Q:
A property owner can legally discriminate against prospective tenants on the basis of religion.
Q:
A lease should provide for the transfer of possession of the leased premises to the landlord at the end of the term.
Q:
The Constitution limits a government's exercise of its power of eminent domain.
Q:
Eminent domain refers to the ultimate right of an owner in fee simple absolute to transfer the property by will to whomever he or she wishes.
Q:
A seller generally has a duty to disclose any known defect that materially affects the value of the property.
Q:
For a party to take by adverse possession, the party's possession must not be hostile to the true owner's rights.
Q:
A warranty deed provides the most protection against defects of title.
Q:
A profit is a right to go onto land in the possession of another and take away some part of the land or some product of the land.
Q:
Easements and profits are nonpossessory interests in land.
Q:
A periodic tenancy is created when a landlord rents his or her property to a tenant "for as long as both shall agree."
Q:
One can only possess rights in real property, not the land itself.