AINS 101 Exam Review with Correct Answers 100%

AINS 101 Exam Review with Correct Answers 100%

1. Actual cash value (ACV): The cost to replace property with new property of like kind and qu
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ality less depreciation.
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2. Adverse selection: Insuring individuals with a high probability of loss at a cost lower than
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the insurer would normally charge for that risk because it wasn't aware of the actual risk invo
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lved.
3. Binder: A temporary written or oral agreement to provide insurance coverage until a formal w
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ritten policy is issued. g g g


4. Book of business: A group of policies with a common characteristic, such as territory or ty
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pe of coverage, or all policies written by a particular insurer or agency.
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5. Broker: An independent producer who represents insurance customers.
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6. Brokerage: Compensation in the form of a flat fee or a commission that is paid by the rein
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surer to the reinsurance intermediary for services provided.
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7. Capacity: The amount of business an insurer is able to write, usually based on a compariso
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n of the insurer's written premiums to its policyholders' surplus
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8. Catastrophe model: A type of computer program that estimates losses from future pot
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ential catastrophic events. g g


9. Certificate of insurance: A brief description of insurance coverage prepared by an insurer
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or its agent and commonly used by policyholders to provide evidence of insurance.
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10. Claim: A demand by a person or business seeking to recover from an insurer for a loss t
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hat may be covered by an insurance policy.
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11. Claimant: A party that makes a claim and that can be either a first-party claimant or a third-
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party claimant. g


12. Claims representative: A person responsible for investigating, evaluating, and settling cl
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aims.
13. Compensatory damages: A payment awarded by a court to reimburse a victim for actual h g g g g g g g g g g g g g g


arm.
14. Condition: Any provision in an insurance policy that qualifies an otherwise enforcea
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ble promise of the insurer.
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, 15. Conditional contract: A contract that one or more parties must perform only under cer
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tain conditions.
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16. Contract of adhesion: Any contract in which one party must either accept the agreemen
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t as written by the other party or reject it.
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17. Contract of indemnity: A contract in which the insurer agrees, in the event of a covered l
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oss, to pay an amount directly related to the amount of the loss.
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18. Damages: Money claimed by, or a monetary award to, a party who has suffered loss or injur
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y for which another party is legally responsible
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19. Declarations page: An insurance policy information page or pages providing specific d
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etails about the insured and the subject of the insurance
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