Minnesota Real Estate Exam Practice Question
When a policy is cancelled by the insured, the insured
Correct Answer: A
Rationale: When a policy is cancelled by the insured, they surrender the unearned premium, which is the portion of the premium that covers the period after cancellation.
Option B is incorrect because the insured does not receive all premiums paid; only the unearned portion is refunded. Option C is misleading; cancelling a policy does not automatically cancel unresolved claims, which may still need to be addressed. Option D is partially true but vague; while the policy is indeed surrendered, it does not specify the financial implications related to the unearned premium, making it less precise than option A.
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