College Composition CLEP Prep Practice Exam

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A policyholder reports water damage and asks the insurer to pay. Which combination must normally be established before the insurer has a valid obligation to indemnify the claim?

A loss adjuster has personally inspected the damage The policyholder has renewed with the insurer for at least two years The loss exceeds the insurer's internal referral threshold A policy was in force, the loss falls within cover, and relevant claim conditions are satisfied

Correct Answer:

A policy was in force, the loss falls within cover, and relevant claim conditions are satisfied

Explanation:

A valid claim normally requires an operative contract, a loss within the policy cover and compliance with relevant claims conditions. An internal referral threshold or a loss adjuster visit is not itself a legal requirement for validity.

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