Washington State Insurance Exam Practice Questions and Answers

Washington State Insurance Exam Practice Questions and Answers is the appearance or assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created. - Answer️️ -Apparent Owned by the policyowner and issue participating policies. Policy owners are entitled to dividends, which are a return of excess premiums and are therefore non-taxable. Dividends are not guaranteed. - Answer️️ -Mutual Company A method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss to share the losses that occur within that group. A RECIPROCAL insurance exchange is a form of risk-sharing arrangement. - Answer️️ -Sharing Is the planned assumption of risk by the insured through the use of deductibles, co-payments, or self-insurance. It is also known as self- insurance when the insured accepts the responsibility for the loss before the insurance company pays. - Answer️️ -Retention Is the AUTHORITY a principal intends to grant to an agent by means of the agent's contract. It is the authority that is written in the contract. - Answer️️ -Express Authority ©SOPHIABENNET@ Friday, August 23, 2024 10:49 AM 2 In order to be characterized as a pure risk, the loss must be due to chance, definite, measurable, and predictable, but not catastrophic. - Answer️️ - Insurable Risk Section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy. Examples: Inspection may be made as needed/ Changes to the policy must be made by insurer and be in writing/ Liberalization clause/ Return of premiums, which dictates methods used. - Answer️️ -Insurance Policy Conditions Type of rating: Method developed by the insurance services office Inc. (ISO) that provides an insurer with that portion of a rate that does not include provisions of expenses or profit and are based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time. - Answer️️ -Loss Costs Rating Is commonly applied in product liability cases. The business is then liable for defective products, regardless of fault or negligence. - Answer️️ -Strict Liability The part of the policy structure that describes the insured perils and the method of indemnification. - Answer️️ -Insuring Agreement States the legal obligations and duties of the parties to the contract. - Answer️️ -Conditions ©SOPHIABENNET@ Friday, August 23, 2024 10:49 AM 3 Provides for payment of the full policy amount in the event of a total loss WITHOUT regard to actual value or depreciation. - Answer️️ -Valued Policy In states that have this, the defendant must have been 100% at fault for an accident and the claimant free of fault if the claimant is to be successful in collecting damages. - Answer️️ -Contributory Negligence A property policy with provisions agreed upon by the insurer and insured as to the amounts of insurance that represents a fair valuation for the property at the time the insurance is written. The amount is paid in a loss, regardless of the insured property's appreciation or depreciation. - Answer️️ -Agreed Value Includes those losses caused by continuous or repeated exposure to conditions resulting in injury or damage to property that is neither intended nor expected. - Answer️️ -Occurance Also known as an indirect loss, is a second financial loss caused by a covered direct loss. - Answer️️ -Consequential loss Refers to other insurance written on the same risk, but not on the same coverage basis. - Answer️️ -Nonconcurrency Four essential elements: Duty, breach, injury, and unbroken chain. - Answer️️ -Negligence ©SOPHIABENNET@ Friday, August 23, 2024 10:49 AM 4 The value of the insured property is determined at the time the policy is written. In the event of a loss, that amount is paid without regard to any COINSURANCE provision. However, if the loss is less than total, the insurer has salvage rights with the insured having first right of refusal of the salvage. - Answer️️ -Stated Amount Property that is moveable - Answer️️ -Personal Property Property that is non-moveable - Answer️️ -Real Property Factors that determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits. - Answer️️ -Components Many states, by statute, require that damage be apportioned based upon the degree of negligence of each party in an accident. - Answer️️ - Comparative Negligence The transfer of a legal right or interest in an insurance policy. In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer. Example: transferring a policy to a friend who will be taking over renters insurance when you mo