1. In the event of a dispute, courts will read insurance policies as they would expect the insured to do. This is known as:

A: attribution bias.

B: the principle-agent problem.

C: subrogation.

D: the principle of indemnity.

E: expectations principles.

2. Which of the following is correct concerning when insurable interest must exist?

A: It must exist at the time of death of the insured for the beneficiary to collect in life insurance.

B: It must exist at the inception and at the time of loss.

C: In life insurance, it must exist at the inception of the policy but it is not necessary at the time of the loss.

D: In property and liability insurance, it must exist at the inception of the contract.

E: It is seldom required in property insurance unless there are liens on the property.