1. Specific insurance ANS >>> This type of insurance designates a particular
item to be insured
2. Blanket insurance ANS >>> This type of insurance covers more than one item of
property at a single location or one more items of property at multiple locations.
3. Speculative ANS >>> possibility of both gain and loss. Not insurable.
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, 4. Pure ANS >>> only the possibility of loss. Insurable.
5. What are the 5 methods of managing or handling risk? ANS >>> avoid,
control, retain, and transfer risk.
6. Hazard ANS >>> A condition or situation which increases the chance for loss
7. Physical Hazards ANS >>> a hazard that arises from the condition, occupancy,
or use of the property itself.
ex ANS >>> skateboard left on the steps
8. Moral Hazards ANS >>> when an individual through carelessness or by
irresponsible actions can increase the possibly for a loss.
ex ANS >>> person who drives carelessly just because they know they are insured.
9. Morale Hazards ANS >>> when a person might create a loss situation on
purpose just to collect from the insurance company.
ex ANS >>> Prearranged, faked theft of someone's old vehicle so they can get an
insurance payout to buy a new vehicle.
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, 10. Replacement Cost ANS >>> The amount of money it would take to replace a
damaged or destroyed item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
11. Actual Cash Value (ACV) ANS >>> Replacement Cost, minus depreciation.
12. Pair and Set Clause ANS >>> Loss to one item of a pair or set does not
constitute loss to the entire pair or set.
13. Appraisal ANS >>> A method of resolving disputes between insurers and
insureds over the amount owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
14. Subrogation ANS >>> An insurer's right to recover the amount of its loss
payment from the third party who is legally responsible for the loss.
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, 15. Arbitration ANS >>> this condition is similar to the Appraisal Condition but it is not
limited to disputes over the value of the loss. It may also be used to resolve other
areas of disagreement between the insured and the insurance company.
16. What does WC SHAVVER stand for? ANS >>> Windstorm, Civil commotion,
Smoke, Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot
17. What does BIG AFFECT stand for? ANS >>> Burglar damage, Ice & snow
weight, Glass breakage, Accidental discharge, Falling objects, Freezing of pipes,
Electrical damage, Collapse, Tearing apart.
18. Insolvency ANS >>> A financial state that occurs if liabilities are greater than
assets.
19. Law of Agency ANS >>> Knowledge of the Agents is Knowledge of the Principal
(Insur- ance Company)
20. Principal ANS >>> Insurance Company
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item to be insured
2. Blanket insurance ANS >>> This type of insurance covers more than one item of
property at a single location or one more items of property at multiple locations.
3. Speculative ANS >>> possibility of both gain and loss. Not insurable.
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, 4. Pure ANS >>> only the possibility of loss. Insurable.
5. What are the 5 methods of managing or handling risk? ANS >>> avoid,
control, retain, and transfer risk.
6. Hazard ANS >>> A condition or situation which increases the chance for loss
7. Physical Hazards ANS >>> a hazard that arises from the condition, occupancy,
or use of the property itself.
ex ANS >>> skateboard left on the steps
8. Moral Hazards ANS >>> when an individual through carelessness or by
irresponsible actions can increase the possibly for a loss.
ex ANS >>> person who drives carelessly just because they know they are insured.
9. Morale Hazards ANS >>> when a person might create a loss situation on
purpose just to collect from the insurance company.
ex ANS >>> Prearranged, faked theft of someone's old vehicle so they can get an
insurance payout to buy a new vehicle.
mailto:https://www.stuvia.com/en-us/user/techgrades
, 10. Replacement Cost ANS >>> The amount of money it would take to replace a
damaged or destroyed item with one of like kind and quality AT THE TIME OF
LOSS. No deduction for depreciation.
11. Actual Cash Value (ACV) ANS >>> Replacement Cost, minus depreciation.
12. Pair and Set Clause ANS >>> Loss to one item of a pair or set does not
constitute loss to the entire pair or set.
13. Appraisal ANS >>> A method of resolving disputes between insurers and
insureds over the amount owed on a covered loss.
-both parties select an appraiser
-the two appraisers select an umpire
-if the appraisers do not agree, the umpire is consulted
-the amount agreed on by 2 out of 3 is the amount that will be paid
14. Subrogation ANS >>> An insurer's right to recover the amount of its loss
payment from the third party who is legally responsible for the loss.
mailto:https://www.stuvia.com/en-us/user/techgrades
, 15. Arbitration ANS >>> this condition is similar to the Appraisal Condition but it is not
limited to disputes over the value of the loss. It may also be used to resolve other
areas of disagreement between the insured and the insurance company.
16. What does WC SHAVVER stand for? ANS >>> Windstorm, Civil commotion,
Smoke, Hail, Aircraft, Vehicles, Volcanic eruption, Explosion, Riot
17. What does BIG AFFECT stand for? ANS >>> Burglar damage, Ice & snow
weight, Glass breakage, Accidental discharge, Falling objects, Freezing of pipes,
Electrical damage, Collapse, Tearing apart.
18. Insolvency ANS >>> A financial state that occurs if liabilities are greater than
assets.
19. Law of Agency ANS >>> Knowledge of the Agents is Knowledge of the Principal
(Insur- ance Company)
20. Principal ANS >>> Insurance Company
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