An elimination (waiting) period is an example of a(n)
A) exclusion.
B) deductible.
C) other-insurance provision.
D) coinsurance provision.
Question 2
James purchased liability insurance with a 100,000 limit from Insurer A. When Insurer A denied a claim that James thought should be covered, he bought a second liability insurance policy with a 150,000 limit from Insurer B.
Before he cancelled the policy with Insurer A, a 60,000 loss occurred. If this loss is settled on a pro rata basis, how much must each insurer pay?
A) Insurer A will pay 10,000 and Insurer B will pay 50,000.
B) Insurer A will pay 20,000 and Insurer B will pay 40,000.
C) Insurer A will pay 24,000 and Insurer B will pay 36,000.
D) Insurer A will pay 40,000 and Insurer B will pay 20,000.
