College Composition CLEP Prep Practice Exam

When assessing a notified claim, what is the insurer's core responsibility before deciding whether to pay?

To accept the policyholder's estimate without checking it To require court proceedings whenever liability is disputed To delay a decision until every possible recovery has been pursued To investigate the facts and apply the policy terms fairly to the circumstances

Correct Answer:

To investigate the facts and apply the policy terms fairly to the circumstances

Explanation:

The insurer must establish the relevant facts and apply the contract fairly. Recoveries and litigation may arise later, but they are not prerequisites to a proper initial coverage decision.

Access more questions from this quiz

Continue to College Composition CLEP Prep Practice Exam for more practice questions and the full quiz experience.

Access More Questions