Texas All-Lines Adjuster Pre-Licensing Questions and Approved Answers | Latest 2023/2024

Texas All-Lines Adjuster Pre-Licensing Questions and Approved Answers | Latest 2023/2024 Chapter 1 -- insurance -- financial took that protects individual and organizations from unforeseen and extraordinary financial losses by transferring risk to another party insured -- individual or organization that pays premiums in exchange for protection insurer -- company, group, or government agency offering financial protection how does insurance work? -- insured pays premium insurer promises to pay for specific losses if they occur insurer's promise gives peace of mind to insured principle of indemnity -- when a loss occurs, an individual should be restored to the approximate financial condition he was in before the loss, no more and no less Q1: How can insurance companies afford to pay for an individual's catastrophic loss? -- Q1: The purpose of the principle of indemnity: -- prevents an insured from profiting from a loss Q1: Which of the following best defines premium? -- the fee paid by the insured in exchange for the insurance policy Q1: What best describes insurance? -- an economic device used to protect against the risk of unforeseen and extraordinary financial loss Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his insurance company and $4000 from the other driver. By receiving profit from his loss, Mark could be in violation of: -- the principle of indemnity he should be in the same financial condition. no better, no worse indemnification may include payment for: -- repairs to property reimbursement for additional living expenses rental cars, hotels costs directly associated with a loss, as allowed under the policy legal contract/insurance policy is: -- contract to provide financial protection for a fee legally binding because it meets the 4 requirements of a legal contract What are the 4 requirements of a legal contract? -- agreement (offer and acceptance) consideration competent parties legal purpose agreement -- mutual consent between offeror and offeree acceptance criteria -- offeree communicates to the offeror his intent to enter into contract must be unconditional - the offeree accepts the terms proposed by the offeror original offeree is the only person who can legally accept the offer An offer may be terminated by: -- revocation by offeror rejection by offeree time lapse