Florida Life and Health Insurance License Practice Test

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Practice this question and more.

If an insured commits arson and is then disabled as a result, what action will the insurer likely take?

  1. Pay the claim as usual

  2. Increase the premium

  3. Rescind the policy and recover payments

  4. Offer a settlement

The correct answer is: Rescind the policy and recover payments

The insurer will likely take this action because committing arson is a deliberate act that violates the terms of the insurance policy. As a result, the insurer has the right to cancel the policy and recover any payments made to the insured. Option A is incorrect because paying the claim as usual would go against the terms of the policy. Option B is incorrect because increasing the premium would not address the issue of the policy being violated. Option D is incorrect because offering a settlement would not address the issue of the policy being violated.

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