Texas All lines adjuster license insurance terms and related concepts Chapter 1 (Well-enlightened)

Law of Large Numbers correct answers the more examples used to develop any statistic, the more reliable the statistic will be Underwriting correct answers The process and insurance company uses to decide whether to except or reject an application for a policy insurance. underwriters evaluate the risk and exposure of a potential policyholders they decide how much coverage the policyholder should receive how much they should pay for it or whether even to except the risk and insure them. underwriting involves measuring risk exposure and determining the premium that needs to be charged to ensure that risk. peril correct answers A cause of property losses I.E, fire, lightning, explosion, windstorm, hurricane, collapse of building, vandalism, accidental discharge, theft. hazard correct answers Is a situation that poses a level of threat to life, Heath, property, or environment. Direct loss correct answers Direct physical loss to property Indirect loss correct answers A loss that arises as a result of damage to property, other than the direct loss to the property. If you own a taxi and someone totals out your taxi, you can't make money because you can't drive your taxi for fares. Principle of indemnity correct answers Insurance will not pay more than the cost of the incident Property insurance correct answers Covers the loss of real and personal property from perils such as fire, theft, windstorm Insuring Agreement correct answers Summarizes the major promises of the insurer in exchange for premium payments by their customer. Deductible correct answers Amount you must pay before you begin receiving any benefits from your insurance company Cancellation correct answers Termination of an insurance policy by insurance company or insurer before the renewal date. All notices must be done in writing. Limit of Liability correct answers The maximum amount for which an insurer is liable. The policy of declarations specifies limits. Loss settlement correct answers The process used to determine the amount of the loss.