NC PROPERTY AND CASUALTY TERMS AND
CONCEPTS | COMPREHENSIVE
DEFINITIONS, KEY INSURANCE TERMS AND
EXAM STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
, Physical Hazard Hazards that arise from the material, structural, operational, or any other physical
features of the risk - such as faulty wiring or staircase without proper railing
Moral Hazards Hazards that arise from the actions of people - such as dishonesty
Morale Hazards Hazards that arise out of carelessness or inattention - such as failure to lock doors,
daydreaming while driving, etc.
perils; losses Hazards lead to ______________ which cause __________________
Law of Large Numbers the larger the number of separate but similar risks, the more predictable the potential
loss.
Homogeneous Units similar risks
homogeneous units; losses Insurance companies require a large number of _____ ______ and a large base of previous
_________ in order to accurately predict future losses.
Catastrophic; Flood In order to be covered, a loss must not be _______________. such as war, nuclear, and
________________.
Spread the risk of loss Companies spread the ____ __ ____ by not insuring a large number of properties in a small
geographic area such as an entire neighborhood.
Insurable Interest in order to purchase insurance, one must have an ______ _______ in the subject of insurance.
ACV; premium If property is over insured, the policy will only pay the ___ plus a proportional share of the
excess ________ plus interest.
loss Insurable interest for property and casualty insurance must be at the time of ______
Policy inception Insurable interest for Life Insurance must be at the time of _______ ______
Indemnify; restore; loss the purpose of property and casualty insurance is to ___________ the insured, meaning to
__________ the insured to the same financial condition that existed prior to the _________.
Property Insurance Covers loss to real property, and personal property.
CONCEPTS | COMPREHENSIVE
DEFINITIONS, KEY INSURANCE TERMS AND
EXAM STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
, Physical Hazard Hazards that arise from the material, structural, operational, or any other physical
features of the risk - such as faulty wiring or staircase without proper railing
Moral Hazards Hazards that arise from the actions of people - such as dishonesty
Morale Hazards Hazards that arise out of carelessness or inattention - such as failure to lock doors,
daydreaming while driving, etc.
perils; losses Hazards lead to ______________ which cause __________________
Law of Large Numbers the larger the number of separate but similar risks, the more predictable the potential
loss.
Homogeneous Units similar risks
homogeneous units; losses Insurance companies require a large number of _____ ______ and a large base of previous
_________ in order to accurately predict future losses.
Catastrophic; Flood In order to be covered, a loss must not be _______________. such as war, nuclear, and
________________.
Spread the risk of loss Companies spread the ____ __ ____ by not insuring a large number of properties in a small
geographic area such as an entire neighborhood.
Insurable Interest in order to purchase insurance, one must have an ______ _______ in the subject of insurance.
ACV; premium If property is over insured, the policy will only pay the ___ plus a proportional share of the
excess ________ plus interest.
loss Insurable interest for property and casualty insurance must be at the time of ______
Policy inception Insurable interest for Life Insurance must be at the time of _______ ______
Indemnify; restore; loss the purpose of property and casualty insurance is to ___________ the insured, meaning to
__________ the insured to the same financial condition that existed prior to the _________.
Property Insurance Covers loss to real property, and personal property.
