Missouri Property and Casualty Insurance Exam Updated 2024/2025 Actual Questions and answers with complete solutions

abandonment - Answer-condition states that the insured may not abandon property to the company and ask to be reimbursed for its full value. Absolute liability - Answer-imposed by law on those participating in certain activities that are considered especially hazardous. Individuals involved in such operations may be held liable for the damages of another, even though the individual was not negligent. Accounting Department - Answer-inances are closely regulated by the state—for example, premiums must be credited to specific accounts, agents must be paid commissions, and proper reserves must be maintained actual cash value (ACV) - Answer-calculated by determining the item's replacement cost (what it would cost to buy a replacement) and subtracting an amount for depreciation Actuarial and Statistical Department - Answer-the numbers department. actuaries - Answer-determine the rates to be charged for various types of insurance. additional coverages, extended coverages, coverage extensions, or other coverages - Answer-have reduced or separate limits of liability or require the insured to meet certain policy requirements before they apply additional insured - Answer-another individual or business listed on the declarations Adequate spread of risk - Answer-Must not happen to a large number of the insured at the same time. Not insuring every person that would be effected by the same risk. Adhesion - Answer-one party has greater power over the other party in drafting the contractadmitted or authorized insurer - Answer-A company that meets the insurance department's standards and is authorized to do business in a state Adverse selection - Answer-the tendency for people with a greater-than-average exposure to loss to purchase insurance. Affordable - Answer-The cost of the insurance must be affordable to the consumer and be able to cover an unexpected loss. Agency Department - Answer-responsibilities include recruiting, appointing, and training, especially if an agent will be an exclusive agent. The department must monitor the sales and marketing efforts of these agents and make sure that the number and quality of agents are closely tuned to the market the company serves. aggregate limit - Answer-limit that applies to all losses occurring within any one policy period. agreed value or stated amount - Answer-provision specifies a certain value that will meet the coinsurance requirement. As long as the policy limit equals or exceeds this amount, the insured will not be assessed a coinsurance penalty. aleatory - Answer-contingent on an uncertain event (a loss) that provides for unequal transfer of value between the parties Apparent authority - Answer-doctrine that holds that an agent may have whatever authority a reasonable person would assume the agent has. In the public's eye, an agent acting under apparent authority binds the company as fully as under expressed or implied authority. Appraisal condition - Answer-either party may demand an appraisal of a loss. In this event, each party chooses an appraiser. The two appraisers then select an umpire. If the appraisers fail to agree on an amount, they submit their differences to the umpire. The decision agreed to by any two of the three is the final amount of indemnification. Each party pays its own appraiser and shares the costs of the ration condition - Answer-may also be used to resolve other areas of disagreement between the insured and the insurance company, between the company and a third party in the case of liability insurance, or between two insurers. assessment companies - Answer-Provide primarily fire and windstorm insurance for small towns and farmers. Charge members a pro rata share of losses at the end of each policy period. assignment condition - Answer-specifies that a policy may not be transferred to anyone else without the written consent of the insurer unless the named insured dies assumption of risk - Answer-when a person knowingly exposes himself to danger or injury. attorney-in-fact - Answer-Handles all business for a company. (Reciprocal Company)