P&CNationaleasy
Which of the following is NOT one of the four essential elements required for a legally enforceable insurance contract?
AOffer and acceptance, typically the application and the insurer's issuance
BConsideration, the premium and the insurer's promise to pay losses
Witness signature on the application attesting to the insured's identity
DCompetent parties and a legal purpose, including insurable interest
Why this is the answer
A valid insurance contract requires (1) an offer and acceptance (typically the application + insurer issuance), (2) consideration (the premium paid by the insured and the promise to pay covered losses by the insurer), (3) competent parties (of legal age and mental capacity, properly licensed insurer), and (4) a legal purpose (insurable interest, not against public policy). Witness signatures are not a general contract-formation requirement under common-law contract doctrine.
Studying for the Property & Casualty exam?
This question comes from our P&C bank. Take a free practice test — no signup.