EXAMFX PERSONAL LINES TERMS |
COMPREHENSIVE INSURANCE
DEFINITIONS, KEY CONCEPTS AND EXAM
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Aggregate Limit The maximum limit of coverage available under a liability policy during a policy year
regardless of the number of claims that may be made or the number of accidents that
may occur.
Agreed Value A property policy with a provision agreed upon by the insurer and insured as to the
amount of insurance that represents a fair valuation for the property at the time the
insurance is written.
Aleatory A contract in which unequal amounts or values are exchanged. The premium paid by the
insured is small in relation to the amount that will be paid by the insurer in the event of
loss.
Alien Insurer An insurance company that is incorporated outside the United States.
Apparent Authority The appearance or the assumption of authority based on the actions, words, or deeds of
the principal or because of circumstances the principal created.
Appraisal An assessment of property to determine either the correct amount of insurance to be
written or the amount of loss to be paid.
Arbitration Method of claim settlement used when the insured and insurer cannot agree upon the
amount of the loss.
Assignment The transfer of a legal right or interest in an insurance policy. In property and casualty
insurance, assignments of policies are usually valid only with the prior written consent of
the insurer.
Authorized Insurer An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Auto A land motor vehicle, trailer or semi-trailer designed for use on public roads, including
attached machinery or equipment; auto does not include mobile equipment.
Bailee A person or entity that has possession of personal property entrusted to him/her by the
owner. For example, a television repair person that has possession of a customer's
television would be a bailee.
Beneficiary The person who receives the benefits from the policy of insurance.
, Binder A temporary contract of insurance issued by an insurer or its agent that places insurance
in effect prior to the policy being issued
Blanket Bond This type of bond covers losses caused by dishonest employees.
Blanket Insurance A single property insurance policy that provides coverage for multiple classes of
property at one location, or provides coverage for one or more classes of property at
multiple locations.
Bodily Injury Liability Legal liability arising from physical trauma to a person or death arising from the negligent
or purposeful act and omissions by an insured.
Boycott An unfair trade practice in which one person refuses to do business with another until he
or she agrees to certain conditions.
Burglary The forced entry into another's premises with felonious intent.
Cancellation The termination of an in-force insurance policy by either the insured or the insurer prior
to the expiration date shown in the policy. Termination may be voluntary, involuntary, or in
mutual accordance with provisions contained in the policy.
Casualty Insurance A type of insurance that covers losses caused by injury to persons or damage to the
property of others.
Cease and Desist Order Requires a person to stop committing an action that is in violation of a provision.
Certificate of Authority Authorizes a company to start conducting business and specifies the kind(s) of insurance
a company can transact. It is illegal for an insurance company to transact insurance
without this certificate.
Certificate of Insurance Written evidence showing that an insurance policy or policies have been issued. The
certificate indicates both the amounts and types of insurance provided.
Class Rating The practice of computing a price per unit of insurance that applies to all applicants
possessing a given set of characteristics.
COMPREHENSIVE INSURANCE
DEFINITIONS, KEY CONCEPTS AND EXAM
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Aggregate Limit The maximum limit of coverage available under a liability policy during a policy year
regardless of the number of claims that may be made or the number of accidents that
may occur.
Agreed Value A property policy with a provision agreed upon by the insurer and insured as to the
amount of insurance that represents a fair valuation for the property at the time the
insurance is written.
Aleatory A contract in which unequal amounts or values are exchanged. The premium paid by the
insured is small in relation to the amount that will be paid by the insurer in the event of
loss.
Alien Insurer An insurance company that is incorporated outside the United States.
Apparent Authority The appearance or the assumption of authority based on the actions, words, or deeds of
the principal or because of circumstances the principal created.
Appraisal An assessment of property to determine either the correct amount of insurance to be
written or the amount of loss to be paid.
Arbitration Method of claim settlement used when the insured and insurer cannot agree upon the
amount of the loss.
Assignment The transfer of a legal right or interest in an insurance policy. In property and casualty
insurance, assignments of policies are usually valid only with the prior written consent of
the insurer.
Authorized Insurer An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Auto A land motor vehicle, trailer or semi-trailer designed for use on public roads, including
attached machinery or equipment; auto does not include mobile equipment.
Bailee A person or entity that has possession of personal property entrusted to him/her by the
owner. For example, a television repair person that has possession of a customer's
television would be a bailee.
Beneficiary The person who receives the benefits from the policy of insurance.
, Binder A temporary contract of insurance issued by an insurer or its agent that places insurance
in effect prior to the policy being issued
Blanket Bond This type of bond covers losses caused by dishonest employees.
Blanket Insurance A single property insurance policy that provides coverage for multiple classes of
property at one location, or provides coverage for one or more classes of property at
multiple locations.
Bodily Injury Liability Legal liability arising from physical trauma to a person or death arising from the negligent
or purposeful act and omissions by an insured.
Boycott An unfair trade practice in which one person refuses to do business with another until he
or she agrees to certain conditions.
Burglary The forced entry into another's premises with felonious intent.
Cancellation The termination of an in-force insurance policy by either the insured or the insurer prior
to the expiration date shown in the policy. Termination may be voluntary, involuntary, or in
mutual accordance with provisions contained in the policy.
Casualty Insurance A type of insurance that covers losses caused by injury to persons or damage to the
property of others.
Cease and Desist Order Requires a person to stop committing an action that is in violation of a provision.
Certificate of Authority Authorizes a company to start conducting business and specifies the kind(s) of insurance
a company can transact. It is illegal for an insurance company to transact insurance
without this certificate.
Certificate of Insurance Written evidence showing that an insurance policy or policies have been issued. The
certificate indicates both the amounts and types of insurance provided.
Class Rating The practice of computing a price per unit of insurance that applies to all applicants
possessing a given set of characteristics.
