College Composition CLEP Prep Practice Exam

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A household insured breaches a policy condition, but the breach is wholly unrelated to the circumstances of a later insured loss. Under the modern claims-handling approach reflected in ICOBS and the Insurance Act 2015, what is the insurer generally expected NOT to do solely because of that unrelated breach?

Ask for evidence of the loss Investigate whether the policy was in force Consider whether an exclusion applies Reject the otherwise valid claim solely because of the unrelated breach

Correct Answer:

Reject the otherwise valid claim solely because of the unrelated breach

Explanation:

For relevant contracts, an insurer should not reject an otherwise valid claim for breach of a condition or warranty where the circumstances of the claim are unconnected with the breach. The insurer may still investigate coverage and evidence normally.

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