NJ Property License 1 Questions And Answers Already Passed

NJ Property License 1 Questions And Answers Already Passed What are the methods of managing risk? Avoidance, transfer, sharing, retention, reduction What is the fee a person pays an insurance company to receive coverage? Premium Self -insuring is typically used for what type of insurance? Workers compensation A tornado that destroys a property would be an example of what? Peril A state-issued document empowering an insurance company to become an admitted insurer is called what? Certificate of Authority Why are the three types of hazards? Physical, moral, and morale The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what? Loss Insurers are classified according to their domicile. What are the three types of insurers? Domestic, foreign, and alien A person who does not lock the doors to his or her house shows an indifferent attitude. What type of hazard does this represent? Morale A situation in which a person can experience only a loss and no gain presents what type of risk? Pure risk What are the four elements of an insurance contract? Agreement (offer and acceptance), consideration, competent parties, and legal purpose What type of insurer is formed under the laws of another state? Foreign What are the five characteristics of an ideally insurable risk? Loss must be 1) due to chance 2) definite and measurable, 3) statistically predictable, 4) not catastrophic, and 5) coverage cannot be mandatory. What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? Law of large numbers For the purpose of insurance, what is risk? Uncertainty of loss An insurance company is domicile do in California and transacts insurance in Nevada. What is this insurer's classification in Nevada? Foreign In the agent/insurer relationship, who is considered the principal? Insurer What type of authority is based on the agent's actions, or words? Apparent In insurance contracts, when is the offer usually made? When the insurance application is submitted What is it called when risks with a higher probability of loss are seeking insurance more often than other risks? Adverse selection What is cancellation? the termination of an insurance policy by either party prior to the policy's expiration date.