USAA Licensing Exam QUESTIONS CORRECTLY ANSWERED

USAA Licensing Exam QUESTIONS CORRECTLY ANSWERED Insurance - ANSWER Transfer of risk from one person or organization to an insurance company What is Indemnity? - ANSWER The principle to restore the insured to the pre-loss economic or financial condition. Law of Large numbers - ANSWER Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest - ANSWER Proof that someone stands to lose financially if a loss occurs; must exist at the time of the loss in property and casualty insurance Binder - ANSWER Temporary insurance contract; commits the company to act as if a policy has been issued Peril - ANSWER Cause of loss Direct Loss - ANSWER Immediate actual physical damage to tangible property Indirect loss - ANSWER Inability to use property as a result of a direct loss Risk - ANSWER Chance of loss; uncertainty of loss Speculative Risk - ANSWER Involves the simultaneous chance of gain or loss: is not insurable Physical Hazard - ANSWER Visible condition that increases the chance of loss Morale Hazard - ANSWER Attitude of carelessness or indifference to loss Insurer - ANSWER The insurance company (a.k.a. second party to the contract) Named Insured - ANSWER A party named on the declarations who is purchasing the insurance policy (a.k.a. first party to the contract) Insured - ANSWER Who the insurer promises to protect in addition to the named insured Limit of Liability - ANSWER The maximum amount that can be paid for a covered loss Consideration - ANSWER An exchange of value between parties to a contract Waiver - ANSWER The voluntary relinquishment of a known right What is Estopple? - ANSWER When an agent tells an insured/makes the statement there is coverage for a loss when there is no such coverage, then the insurer is prevented from denying the claim as a result of what precedent? Concealment - ANSWER Insured or prospect deliberately withholding material information from the insurer, this voids coverage Material Misrepresentation - ANSWER Insured or prospect giving incorrect material information to the insurer, this voids coverage