Exam FX- Property and Casualty Glossary Michigan Questions With Complete Solutions

Abandonment correct answer: The abdication of insured property into the hands of another, or into the possession of no one in particular. Accident correct answer: An unplanned, unforeseen event which occurs suddenly and at a specific place. Actual Cash Value (ACV) correct answer: The required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation. Additional Coverage correct answer: A provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium. Additional Insureds correct answer: Individuals or business that are not named as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest. Adhesion correct answer: A contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured. Admitted Insurer correct answer: An insurance company authorized and licensed to transact business in a particular state. Adverse Selection correct answer: The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability. Agent correct answer: An individual who is licensed to sell, negotiate, or effect insurance contracts