10/10/25, 7:31 AM NC Personal Lines Licensing Exam Part 1 Terms and Concepts EXAM 2025 TEST!! Graded A+ | 2025|2026 EXAM UPDATE Flas…
NC Personal Lines Licensing Exam Part 1 Terms
and Concepts EXAM 2025 TEST!! Graded A+ |
2025|2026 EXAM UPDATE
Save
Terms in this set (43)
The uncertainty or chance of a loss occurring.
Pure- Insurable, only a chance of loss, no financial
Risk
gain
Speculative- Not insurable, chance of loss or gain (ex:
gambling)
Conditions or situations that increase the probability
of an insured loss occurring
Types:
Hazard Physical (individual characteristics increase chances of
the cause of loss)
Moral (lying on application)
Morale (indifference)
Peril The cause of a loss (loss is the basis of a claim)
The estimated total cost (both insured and uninsured)
Economic Loss
of an accident.
Reimbursement to the extent of the financial loss, not
Indemnity
profit
https://quizlet.com/1090621702/nc-personal-lines-licensing-exam-part-1-terms-and-concepts-exam-2025-test-graded-a-20252026-exam-update-flash-… 1/6
, 10/10/25, 7:31 AM NC Personal Lines Licensing Exam Part 1 Terms and Concepts EXAM 2025 TEST!! Graded A+ | 2025|2026 EXAM UPDATE Flas…
The insured must be in a position to lose financially if
Insurable Interest a covered loss occurs, must exist at the time of the
loss
Amount you must pay before you begin receiving any
Deductible benefits from your insurance company, higher
deductible usually lowers the amount of the premium
direct physical damage to buildings and/or personal
property
Direct Loss
includes other damage where the insured peril was
the proximate cause of loss (ex: water damage from
putting out building fire)
Consequential losses, considered a result of a direct
Indirect Loss loss (extra living expense incurred while home is
being repaired)
Named peril- lists specifically covered perils
Types of Perils Open (all-risk) peril- everything not specifically listed
in exclusions
a policy that covers a specific kind of property for a
Specific Coverage
specified amount of insurance
"Blankets" more than one property, type of property,
Blanket Coverage
or coverage under a single limit.
1. ACV
Types of Property Loss 2. Replacement Cost
Valuation 3. Functional Replacement Cost
4. Salvage Value
the payment you receive is based on the replacement
Actual Cash Value
cost of an item minus depreciation
The cost to repair or replace property using new
Replacement Cost materials of like kind and quality with no deduction for
depreciation.
https://quizlet.com/1090621702/nc-personal-lines-licensing-exam-part-1-terms-and-concepts-exam-2025-test-graded-a-20252026-exam-update-flash-… 2/6
NC Personal Lines Licensing Exam Part 1 Terms
and Concepts EXAM 2025 TEST!! Graded A+ |
2025|2026 EXAM UPDATE
Save
Terms in this set (43)
The uncertainty or chance of a loss occurring.
Pure- Insurable, only a chance of loss, no financial
Risk
gain
Speculative- Not insurable, chance of loss or gain (ex:
gambling)
Conditions or situations that increase the probability
of an insured loss occurring
Types:
Hazard Physical (individual characteristics increase chances of
the cause of loss)
Moral (lying on application)
Morale (indifference)
Peril The cause of a loss (loss is the basis of a claim)
The estimated total cost (both insured and uninsured)
Economic Loss
of an accident.
Reimbursement to the extent of the financial loss, not
Indemnity
profit
https://quizlet.com/1090621702/nc-personal-lines-licensing-exam-part-1-terms-and-concepts-exam-2025-test-graded-a-20252026-exam-update-flash-… 1/6
, 10/10/25, 7:31 AM NC Personal Lines Licensing Exam Part 1 Terms and Concepts EXAM 2025 TEST!! Graded A+ | 2025|2026 EXAM UPDATE Flas…
The insured must be in a position to lose financially if
Insurable Interest a covered loss occurs, must exist at the time of the
loss
Amount you must pay before you begin receiving any
Deductible benefits from your insurance company, higher
deductible usually lowers the amount of the premium
direct physical damage to buildings and/or personal
property
Direct Loss
includes other damage where the insured peril was
the proximate cause of loss (ex: water damage from
putting out building fire)
Consequential losses, considered a result of a direct
Indirect Loss loss (extra living expense incurred while home is
being repaired)
Named peril- lists specifically covered perils
Types of Perils Open (all-risk) peril- everything not specifically listed
in exclusions
a policy that covers a specific kind of property for a
Specific Coverage
specified amount of insurance
"Blankets" more than one property, type of property,
Blanket Coverage
or coverage under a single limit.
1. ACV
Types of Property Loss 2. Replacement Cost
Valuation 3. Functional Replacement Cost
4. Salvage Value
the payment you receive is based on the replacement
Actual Cash Value
cost of an item minus depreciation
The cost to repair or replace property using new
Replacement Cost materials of like kind and quality with no deduction for
depreciation.
https://quizlet.com/1090621702/nc-personal-lines-licensing-exam-part-1-terms-and-concepts-exam-2025-test-graded-a-20252026-exam-update-flash-… 2/6
