Washington State Insurance Exam Study Guide (
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is the appearance or assumption of authority based on the actions, words, or
deeds of the principal or because of circumstances the principal created. -
(ANSWER)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. - (ANSWER)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. -
(ANSWER)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.
- (ANSWER)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. - (ANSWER)Express
Authority
,In order to be characterized as a pure risk, the loss must be due to chance,
definite, measurable, and predictable, but not catastrophic. - (ANSWER)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. - (ANSWER)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. - (ANSWER)Loss Costs Rating
Is commonly applied in product liability cases. The business is then liable for
defective products, regardless of fault or negligence. - (ANSWER)Strict Liability
The part of the policy structure that describes the insured perils and the method
of indemnification. - (ANSWER)Insuring Agreement
States the legal obligations and duties of the parties to the contract. -
(ANSWER)Conditions
, Provides for payment of the full policy amount in the event of a total loss
WITHOUT regard to actual value or depreciation. - (ANSWER)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. - (ANSWER)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. - (ANSWER)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. -
(ANSWER)Occurance
Also known as an indirect loss, is a second financial loss caused by a covered
direct loss. - (ANSWER)Consequential loss
Refers to other insurance written on the same risk, but not on the same coverage
basis. - (ANSWER)Nonconcurrency
Four essential elements: Duty, breach, injury, and unbroken chain. -
(ANSWER)Negligence
Version) | All Questions and Correct Answers |
Verified Answers | Just Released | Newest Version
is the appearance or assumption of authority based on the actions, words, or
deeds of the principal or because of circumstances the principal created. -
(ANSWER)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. - (ANSWER)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. -
(ANSWER)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.
- (ANSWER)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. - (ANSWER)Express
Authority
,In order to be characterized as a pure risk, the loss must be due to chance,
definite, measurable, and predictable, but not catastrophic. - (ANSWER)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. - (ANSWER)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. - (ANSWER)Loss Costs Rating
Is commonly applied in product liability cases. The business is then liable for
defective products, regardless of fault or negligence. - (ANSWER)Strict Liability
The part of the policy structure that describes the insured perils and the method
of indemnification. - (ANSWER)Insuring Agreement
States the legal obligations and duties of the parties to the contract. -
(ANSWER)Conditions
, Provides for payment of the full policy amount in the event of a total loss
WITHOUT regard to actual value or depreciation. - (ANSWER)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. - (ANSWER)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. - (ANSWER)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. -
(ANSWER)Occurance
Also known as an indirect loss, is a second financial loss caused by a covered
direct loss. - (ANSWER)Consequential loss
Refers to other insurance written on the same risk, but not on the same coverage
basis. - (ANSWER)Nonconcurrency
Four essential elements: Duty, breach, injury, and unbroken chain. -
(ANSWER)Negligence
