NEW YORK INDEPENDENT GENERAL
ADJUSTER EXAM PREP: SERIES 17-
70 100% ACCURATE
Agreement - ANSWEROne of the four requirements of a legally binding contract. All
parties agree to the terms of the contract.
Competence - ANSWEROne of the four qualifications of a legally binding contract. All
parties must be competent with the necessary legal and mental capacity.
Consideration - ANSWEROne of the four qualifications of a legally binding contract. All
parties must bring something of value to the contract.
Four requirements of a legal a contract - ANSWERagreement, consideration, competent
parties, legal purpose
Indemnification - ANSWERReimbursement for a loss, which leaves the claimant in the
same financial position that she was in before the loss
Indemnify - ANSWERTo restore by payment, repair, or replacement
Indemnity Insurance - ANSWERInsurance that indemnifies loss as opposed to liability
Insurance - ANSWERA financial device that transfers the risk of unexpected,
catastrophic loss from one party to another
Insurance Company - ANSWERCompany which sells insurance policies to individuals
or to other companies
Insurance policy - ANSWERA contract wherein an insured pays premiums to an insurer
in exchange for financial protection in the event of a covered loss
Insured - ANSWERA person covered by an insurance policy
Insurer - ANSWERThe person providing coverage to one or more insureds
Loss - ANSWERBodily injury, property damage, or damage caused by the insured's
negligent acts; loss is the basis for an insurance claim. Loss can also mean the sum the
insured will have to pay
Policyholder - ANSWERAlso called the "insured", a policyholder is a person who has
purchased an insurance policy - or contract-from an insurer.
,Premium - ANSWERA scheduled an affordable fee, paid by the policyholder to the
insurer, in return for coverage.
Principle of Indemnity - ANSWERThe principle that insurance policies should provide a
benefit no greater than the loss suffered by an insured. Insured cannot profit from the
loss.
Adhesion - ANSWERCharacteristics of an insurance contract. Means that one party
(The insurer) sets the terms, and the other (the policyholder) can "take it or leave it"
Aleatory - ANSWERA contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss.
Certificate of Insurance - ANSWERA legal document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Conditions - ANSWERprovisions in the policy that qualify or place limitations on the
insurer's promise to perform
Coverages - ANSWERThe amount and extent of protection provided by an insurance
policy.
Declarations Page - ANSWERThe basic information about a policy:
Who - names of insurer and insured
What - description of insured property
Where - address and legal description of insured property
When - effective and expiration dates.
How Much - limits of coverage, deductible, premium
Definitions - ANSWERClarifies terms used in the policy
Endorsement(s) - ANSWERAn optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific property types or perils
Exclusions - ANSWERA sections of an insurance policy that reduces coverage by listing
specific individuals, property, or perils that the policy does NOT cover
Good Faith - ANSWERActing honestly and fairly, with good intentions and full
disclosure.
Insuring Agreement - ANSWERThe section of an insurance policy containing the
insurer's promise to pay, the description of coverage provided and perils insured
against.
, Legal Purpose - ANSWEROn of the four qualifications of a legally binding contract. The
purpose of the contract must be legal and not against public policy.
Unilateral - ANSWERA characteristic of insurance contracts. It means that only one of
the parties (the insurer) makes a promise to perform. The insurer is obligated to fulfill
this promise, whereas the insured is free to void the contract at any time.
Utmost Good Faith - ANSWERAn obligation to act in complete honesty and to disclose
all relevant facts.
Six Characteristics of Insurance Contract - ANSWER1. Personal Contract
2. Contract of Adhesion
3. Utmost Good Faith Contract
4. Aleatory Contract
5. Unilateral Contract
6. Conditional Contract
Fraternal Benefits Societies - ANSWERNon-profit, mutual aid organizations that engage
primarily in charitable of benevolent activities. Thy offer their members insurance
against death, disease, and disability. Also known as Fraternal Associations.
Government Insurance - ANSWERAn insurance program where risks are transferred to
a government agency. Also known as social insurance. Government insurance usually
exists in situations where the exposure to loss is too high for private insurers to reliably
insure risks.
Mutual Insurance Company - ANSWERAn insurance company that is owned by its
policyholders who participate in dividends. These companies have no shareholders and
are not traded publicly.
Non-commercial - ANSWERNon-Commercial insurers are not-for-profit insurance
companies that return profits to policyholders by reducing premiums or expanding
benefits.
Private Insurance - ANSWERPrivate insurance is the term for any insurance other than
social insurance. Social insurance programs are run by the government instead of by
private individuals.
Reciprocal Insurer - ANSWERan unincorporated organization in which all members
insure one another
Reinsurers - ANSWERCompanies which sell insurance to insurers to reduce the
insurer's exposure to loss.
Risk Purchasing Group - ANSWERGroups of people with similar insurance needs who
form an organization to buy insurance as a group.
ADJUSTER EXAM PREP: SERIES 17-
70 100% ACCURATE
Agreement - ANSWEROne of the four requirements of a legally binding contract. All
parties agree to the terms of the contract.
Competence - ANSWEROne of the four qualifications of a legally binding contract. All
parties must be competent with the necessary legal and mental capacity.
Consideration - ANSWEROne of the four qualifications of a legally binding contract. All
parties must bring something of value to the contract.
Four requirements of a legal a contract - ANSWERagreement, consideration, competent
parties, legal purpose
Indemnification - ANSWERReimbursement for a loss, which leaves the claimant in the
same financial position that she was in before the loss
Indemnify - ANSWERTo restore by payment, repair, or replacement
Indemnity Insurance - ANSWERInsurance that indemnifies loss as opposed to liability
Insurance - ANSWERA financial device that transfers the risk of unexpected,
catastrophic loss from one party to another
Insurance Company - ANSWERCompany which sells insurance policies to individuals
or to other companies
Insurance policy - ANSWERA contract wherein an insured pays premiums to an insurer
in exchange for financial protection in the event of a covered loss
Insured - ANSWERA person covered by an insurance policy
Insurer - ANSWERThe person providing coverage to one or more insureds
Loss - ANSWERBodily injury, property damage, or damage caused by the insured's
negligent acts; loss is the basis for an insurance claim. Loss can also mean the sum the
insured will have to pay
Policyholder - ANSWERAlso called the "insured", a policyholder is a person who has
purchased an insurance policy - or contract-from an insurer.
,Premium - ANSWERA scheduled an affordable fee, paid by the policyholder to the
insurer, in return for coverage.
Principle of Indemnity - ANSWERThe principle that insurance policies should provide a
benefit no greater than the loss suffered by an insured. Insured cannot profit from the
loss.
Adhesion - ANSWERCharacteristics of an insurance contract. Means that one party
(The insurer) sets the terms, and the other (the policyholder) can "take it or leave it"
Aleatory - ANSWERA contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss.
Certificate of Insurance - ANSWERA legal document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Conditions - ANSWERprovisions in the policy that qualify or place limitations on the
insurer's promise to perform
Coverages - ANSWERThe amount and extent of protection provided by an insurance
policy.
Declarations Page - ANSWERThe basic information about a policy:
Who - names of insurer and insured
What - description of insured property
Where - address and legal description of insured property
When - effective and expiration dates.
How Much - limits of coverage, deductible, premium
Definitions - ANSWERClarifies terms used in the policy
Endorsement(s) - ANSWERAn optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific property types or perils
Exclusions - ANSWERA sections of an insurance policy that reduces coverage by listing
specific individuals, property, or perils that the policy does NOT cover
Good Faith - ANSWERActing honestly and fairly, with good intentions and full
disclosure.
Insuring Agreement - ANSWERThe section of an insurance policy containing the
insurer's promise to pay, the description of coverage provided and perils insured
against.
, Legal Purpose - ANSWEROn of the four qualifications of a legally binding contract. The
purpose of the contract must be legal and not against public policy.
Unilateral - ANSWERA characteristic of insurance contracts. It means that only one of
the parties (the insurer) makes a promise to perform. The insurer is obligated to fulfill
this promise, whereas the insured is free to void the contract at any time.
Utmost Good Faith - ANSWERAn obligation to act in complete honesty and to disclose
all relevant facts.
Six Characteristics of Insurance Contract - ANSWER1. Personal Contract
2. Contract of Adhesion
3. Utmost Good Faith Contract
4. Aleatory Contract
5. Unilateral Contract
6. Conditional Contract
Fraternal Benefits Societies - ANSWERNon-profit, mutual aid organizations that engage
primarily in charitable of benevolent activities. Thy offer their members insurance
against death, disease, and disability. Also known as Fraternal Associations.
Government Insurance - ANSWERAn insurance program where risks are transferred to
a government agency. Also known as social insurance. Government insurance usually
exists in situations where the exposure to loss is too high for private insurers to reliably
insure risks.
Mutual Insurance Company - ANSWERAn insurance company that is owned by its
policyholders who participate in dividends. These companies have no shareholders and
are not traded publicly.
Non-commercial - ANSWERNon-Commercial insurers are not-for-profit insurance
companies that return profits to policyholders by reducing premiums or expanding
benefits.
Private Insurance - ANSWERPrivate insurance is the term for any insurance other than
social insurance. Social insurance programs are run by the government instead of by
private individuals.
Reciprocal Insurer - ANSWERan unincorporated organization in which all members
insure one another
Reinsurers - ANSWERCompanies which sell insurance to insurers to reduce the
insurer's exposure to loss.
Risk Purchasing Group - ANSWERGroups of people with similar insurance needs who
form an organization to buy insurance as a group.
