CHAPTER 1. Property and Casualty
Exam Texas
1. ACCIDENT - ANS-A sudden and unexpected event
2. ACTUAL CASH VALUE (ACV) - ANS-ACV is computed by subtracting depreciation from
the replacement cost.
3. ACV=DPR-RPC
4.
5. ACV = R × (E - C) / E
6.
7. Where:
8. ACV = actual cash value
9. R = replacement cost or purchase price of the item
10. E = expected life of the item
11. C = current life of the item
12. Actuaries - ANS-1.insurance statistician: a statistician who calculates insurance
premiums, risks, dividends, and annuity rates
13. ADVERSE SELECTION - ANS-used to protect the insurer from people who are poor
risks who are more likely to purchase insurance than average risks. "People who may
conceal their condition to get insurance."
14. AUTHORIZED AND NONAUTHORIZED COMPANIES(ADMITTED AND
NONADMITTED) - ANS-AUTHORIZED(admitted)company-have a certificate of
authority, meet the capital and surplus requirements required by state are considered
Authorized or admitted.
15. NONAUTHORIZED(NONADMITTED)-insurers who have not been approved to do
business in the state.
16. BINDER - ANS-An ORAL or WRITTEN agreement that provides TEMPORARY evidence
of insurance until a policy can be issued. It does not guarantee that a policy will be
issued, but it is temporary until a contract can be underwritten from home or office.
17. BLANKET VS SPECIFIC - ANS-BLANKET COVERAGE-provides coverage for different
classes of property under one policy.
18. SPECIFIC INSURANCE-is when you insure a specific item or specific kind of property.
19. BROKERS - ANS-Independant Producers sell insurance through many different
insurance companies. A producer acting as a broker represents the insured in selecting
the best coverage available from the various companies they represent. Brokers do not
have binding authority.
20. BURGLARY - ANS-The taking of property from a premise that is closed and locked tight.
There must be evidence of forced entry or exit. It also includes forcing a security
guard/employee to open a locked store.
, 21. CAPTIVE(EXCLUSIVE)AGENCY SYSTEM - ANS-represent on particular insurer in a
specfic geographical area. Captive agencies recruit insurance producers who are trained
and supervised by a company employee or a general agent.
22. PRODUCER CATEGORY
23. a captive or exclusive producer represents one insurance company and sells only that
company's insurance products. Represents the company, not the insured.
24. CASULTY INSURANCE - ANS-Protects you against liabilty for BODILY INJURY (BI) and
PROPERTY DAMAGE (PD)
25. CERTIFICATE OF INSURANCE - ANS-Document that serves to provide evidence that
you have purchased certain types of insurance coverages and limits.
26. CHARACTERISTICS (ELEMENTS) OF INSURABLE RISKS - ANS-To be Insurable, the
risk must:
27. 1.Be PREDICTABLE-an insurer must be capable of statistically predicting the possibility
of loss.
28. 2.Be a CHANCE OCCURRENCE- the risk must be outside the insureds control. It must
be unexpected, accidental, or uncertain.
29. 3.Not be CATASTROPHIC-Insurers typically will not insure risks that will expose them to
losses that may occur to large number of insureds at the same time.
30. 4.Be MEASURABLE and DEFINITIVE- an insurable risk is a loss that has a definite
monetary value. The insurer must be able to measure or value a potential loss.
31. 5.Be AFFORDABLE- Loss must cause a financial or economic hardship to the insured or
to the insureds family.
32. COINSURANCE CLAUSE - ANS-A clause in most insurance policies that penalizes you
for not having adequate coverage on your personal or private property.
33. COINSURANCE PENALTY - ANS-is a penalty imposed on the insured by the insurance
carrier for under reporting/declaring/insuring the value of tangible property or business
income.
34. COINSURANCE/INSURANCE TO VALUE - ANS-Splitting or spreading of risk among
the insurance company and the insured. It rewards you when you buy adequate
amounts of coverage, but if you dont.
35. COMMERCIAL LINES INSURANCE - ANS-Refers to property and casualty insurance to
cover a BUSINESS as opposed to personal lines
36. CONDITIONS - ANS-The CONDITIONS are provisions in the policy that qualify or place
limitations on the insurers promise to pay or perform.
37. DEDUCTIBLE - ANS-Portion of covered loss that is not paid by the insurance
company.The company will pay for the remaining portion up to the policy limits. The
higher the deductible, the lower premium.
38. DEPRECIATION - ANS-amount of decrease: the amount or percentage by which
something decreases in value over time, usually one year
39. ACV = RCV - (DPR * RCV * Age)
40.
41. ACV = Actual Cash Value (Depreciated Value)
42. RCV = Replacement Cash Value (Cost to Purchase Now)
43. DPR = Depreciation Rate (% per year)
Exam Texas
1. ACCIDENT - ANS-A sudden and unexpected event
2. ACTUAL CASH VALUE (ACV) - ANS-ACV is computed by subtracting depreciation from
the replacement cost.
3. ACV=DPR-RPC
4.
5. ACV = R × (E - C) / E
6.
7. Where:
8. ACV = actual cash value
9. R = replacement cost or purchase price of the item
10. E = expected life of the item
11. C = current life of the item
12. Actuaries - ANS-1.insurance statistician: a statistician who calculates insurance
premiums, risks, dividends, and annuity rates
13. ADVERSE SELECTION - ANS-used to protect the insurer from people who are poor
risks who are more likely to purchase insurance than average risks. "People who may
conceal their condition to get insurance."
14. AUTHORIZED AND NONAUTHORIZED COMPANIES(ADMITTED AND
NONADMITTED) - ANS-AUTHORIZED(admitted)company-have a certificate of
authority, meet the capital and surplus requirements required by state are considered
Authorized or admitted.
15. NONAUTHORIZED(NONADMITTED)-insurers who have not been approved to do
business in the state.
16. BINDER - ANS-An ORAL or WRITTEN agreement that provides TEMPORARY evidence
of insurance until a policy can be issued. It does not guarantee that a policy will be
issued, but it is temporary until a contract can be underwritten from home or office.
17. BLANKET VS SPECIFIC - ANS-BLANKET COVERAGE-provides coverage for different
classes of property under one policy.
18. SPECIFIC INSURANCE-is when you insure a specific item or specific kind of property.
19. BROKERS - ANS-Independant Producers sell insurance through many different
insurance companies. A producer acting as a broker represents the insured in selecting
the best coverage available from the various companies they represent. Brokers do not
have binding authority.
20. BURGLARY - ANS-The taking of property from a premise that is closed and locked tight.
There must be evidence of forced entry or exit. It also includes forcing a security
guard/employee to open a locked store.
, 21. CAPTIVE(EXCLUSIVE)AGENCY SYSTEM - ANS-represent on particular insurer in a
specfic geographical area. Captive agencies recruit insurance producers who are trained
and supervised by a company employee or a general agent.
22. PRODUCER CATEGORY
23. a captive or exclusive producer represents one insurance company and sells only that
company's insurance products. Represents the company, not the insured.
24. CASULTY INSURANCE - ANS-Protects you against liabilty for BODILY INJURY (BI) and
PROPERTY DAMAGE (PD)
25. CERTIFICATE OF INSURANCE - ANS-Document that serves to provide evidence that
you have purchased certain types of insurance coverages and limits.
26. CHARACTERISTICS (ELEMENTS) OF INSURABLE RISKS - ANS-To be Insurable, the
risk must:
27. 1.Be PREDICTABLE-an insurer must be capable of statistically predicting the possibility
of loss.
28. 2.Be a CHANCE OCCURRENCE- the risk must be outside the insureds control. It must
be unexpected, accidental, or uncertain.
29. 3.Not be CATASTROPHIC-Insurers typically will not insure risks that will expose them to
losses that may occur to large number of insureds at the same time.
30. 4.Be MEASURABLE and DEFINITIVE- an insurable risk is a loss that has a definite
monetary value. The insurer must be able to measure or value a potential loss.
31. 5.Be AFFORDABLE- Loss must cause a financial or economic hardship to the insured or
to the insureds family.
32. COINSURANCE CLAUSE - ANS-A clause in most insurance policies that penalizes you
for not having adequate coverage on your personal or private property.
33. COINSURANCE PENALTY - ANS-is a penalty imposed on the insured by the insurance
carrier for under reporting/declaring/insuring the value of tangible property or business
income.
34. COINSURANCE/INSURANCE TO VALUE - ANS-Splitting or spreading of risk among
the insurance company and the insured. It rewards you when you buy adequate
amounts of coverage, but if you dont.
35. COMMERCIAL LINES INSURANCE - ANS-Refers to property and casualty insurance to
cover a BUSINESS as opposed to personal lines
36. CONDITIONS - ANS-The CONDITIONS are provisions in the policy that qualify or place
limitations on the insurers promise to pay or perform.
37. DEDUCTIBLE - ANS-Portion of covered loss that is not paid by the insurance
company.The company will pay for the remaining portion up to the policy limits. The
higher the deductible, the lower premium.
38. DEPRECIATION - ANS-amount of decrease: the amount or percentage by which
something decreases in value over time, usually one year
39. ACV = RCV - (DPR * RCV * Age)
40.
41. ACV = Actual Cash Value (Depreciated Value)
42. RCV = Replacement Cash Value (Cost to Purchase Now)
43. DPR = Depreciation Rate (% per year)
