West Virginia Adjusters Practice Exam

Under which condition might Dependable Insurance immediately cancel Owen's policy?

1. Upon Owen's request.

2. Dependable Insurance never cancels policies immediately.

3. If Owen commits insurance fraud.

4. Upon payment of the next premium.

The correct answer is: Upon Owen's request.

The correct answer is that Dependable Insurance may immediately cancel Owen's policy if he commits insurance fraud. This is a serious infraction that undermines the entire contract of insurance. When a policyholder is found to have engaged in fraudulent activities relating to their insurance policy, the insurer is typically granted the right to cancel the policy immediately, as maintaining the integrity of the insurance contract is paramount. In contrast, while a policyholder can request to cancel their policy, this does not typically lead to an immediate cancellation by the insurance company; there are often processes and waiting periods involved in such a request. Similarly, the assertion that Dependable Insurance never cancels policies immediately is misleading—insurance companies do retain the authority to cancel policies under certain conditions, including fraud. Lastly, the payment of the next premium would simply continue coverage and would not in itself trigger an immediate cancellation of the policy.