Alabama Property and Casualty Insurance Exam (Passed!)

Abandonment correct answers An attempt by an insured to receive full value for a partially damaged item by offering the damaged property to the insurance company. The company is under no obligation to pay for abandoned property. Absolute Liability correct answers A tort law concept in which an individual can be found legally responsible without being negligent (failure to take proper care in doing something) Acceptance correct answers An element of contract law under which one party accepts the offer of another party Accident correct answers An unexpected and unintended chance happening occurring at a known time and place Actual Cash Value (ACV) correct answers A method of valuing loss under which the insurance company will pay the Replacement Cost Value of an item minus depreciation Additional Coverages correct answers Additional Coverages are provided without additional cost in property contracts. Examples would include payment for Debris Removal and for a Fire Department Service Charge. The coverages may pay an amount in addition to the stated limits of the policy. Additional Living Expenses correct answers An indirect loss coverage designed to offset the additional cost of living in temporary quarters while a dwelling is being rebuilt or repaired. Found in homeowners and Dwelling policies. Admitted Company correct answers A company has sought admission and been approved to conduct the business of insurance within a particular state. Adverse Selection correct answers In insurance, Adverse Selection can best be described as the likelihood of the worst possible risks seeking the best possible coverage. Adverse Selection Example correct answers A person who seeks to buy insurance for his home following a TV broadcast that a wildfire is three miles away and blowing in his direction. Advertising Injury Liability correct answers Liability resulting from damage caused to a business by the misrepresentations of another. Also can include theft of a copyrighted trademark. Agent correct answers Insurance Producer Aggregate Limit correct answers Also known as General Aggregate Limit, this is the limit expressed in a commercial liability policy indicating how much an insurance company will pay in total during any policy period