EXAMFX PERSONAL LINES TERMS QUESTIONS WITH
COMPLETE SOLUTION
Abandonment
The relinquishing of insured property into the hands of another, or into the possession of
no one in particular.
Accident
A sudden, unplanned and unexpected event, not under the control of the insured,
resulting in injury or damage that is neither expected nor intended.
Actual Cash Value
The replacement cost of lost or damaged property minus depreciation.
Additional Coverage
A provision in an insurance policy that provides additional amounts of coverage for
specific loss expense at no additional premium.
Additional Insureds
Individuals or business that are not named as insureds on the declaration page, but are
protected by the policy, usually in regard to a specific interest.
Adhesion
A contract which is offered on a take-it-or leave-it basis. The insured's only option is to
either accept or reject the contract; he/she has no input concerning its terms.
Admitted Insurer
An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Adverse Selection
The insuring of risks that are of a poorer class (more prone to losses) than the average
risk.
Agent
A person who acts on the behalf of the insurer to sell, negotiate, or effect insurance
contracts; also known as a producer.
Aggregate Limit
The maximum limit of coverage available under a liability policy during a policy year
regardless of the number of claims that may be made or the number of accidents that
may occur.
Agreed Value
A property policy with a provision agreed upon by the insurer and insured as to the
amount of insurance that represents a fair valuation for the property at the time the
insurance is written.
Aleatory
A contract in which unequal amounts or values are exchanged. The premium paid by
the insured is small in relation to the amount that will be paid by the insurer in the event
of loss.
, Alien Insurer
An insurance company that is incorporated outside the United States.
Apparent Authority
The appearance or the assumption of authority based on the actions, words, or deeds
of the principal or because of circumstances the principal created.
Appraisal
An assessment of property to determine either the correct amount of insurance to be
written or the amount of loss to be paid.
Arbitration
Method of claim settlement used when the insured and insurer cannot agree upon the
amount of the loss.
Assignment
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.
Authorized Insurer
An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Auto
A land motor vehicle, trailer or semi-trailer designed for use on public roads, including
attached machinery or equipment; auto does not include mobile equipment.
Bailee
A person or entity that has possession of personal property entrusted to him/her by the
owner. For example, a television repair person that has possession of a customer's
television would be a bailee.
Beneficiary
The person who receives the benefits from the policy of insurance.
Binder
A temporary contract of insurance issued by an insurer or its agent that places
insurance in effect prior to the policy being issued
Blanket Bond
This type of bond covers losses caused by dishonest employees.
Blanket Insurance
A single property insurance policy that provides coverage for multiple classes of
property at one location, or provides coverage for one or more classes of property at
multiple locations.
Bodily Injury Liability
Legal liability arising from physical trauma to a person or death arising from the
negligent or purposeful act and omissions by an insured.
Boycott
An unfair trade practice in which one person refuses to do business with another until
he or she agrees to certain conditions.
Burglary
The forced entry into another's premises with felonious intent.
Cancellation
COMPLETE SOLUTION
Abandonment
The relinquishing of insured property into the hands of another, or into the possession of
no one in particular.
Accident
A sudden, unplanned and unexpected event, not under the control of the insured,
resulting in injury or damage that is neither expected nor intended.
Actual Cash Value
The replacement cost of lost or damaged property minus depreciation.
Additional Coverage
A provision in an insurance policy that provides additional amounts of coverage for
specific loss expense at no additional premium.
Additional Insureds
Individuals or business that are not named as insureds on the declaration page, but are
protected by the policy, usually in regard to a specific interest.
Adhesion
A contract which is offered on a take-it-or leave-it basis. The insured's only option is to
either accept or reject the contract; he/she has no input concerning its terms.
Admitted Insurer
An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Adverse Selection
The insuring of risks that are of a poorer class (more prone to losses) than the average
risk.
Agent
A person who acts on the behalf of the insurer to sell, negotiate, or effect insurance
contracts; also known as a producer.
Aggregate Limit
The maximum limit of coverage available under a liability policy during a policy year
regardless of the number of claims that may be made or the number of accidents that
may occur.
Agreed Value
A property policy with a provision agreed upon by the insurer and insured as to the
amount of insurance that represents a fair valuation for the property at the time the
insurance is written.
Aleatory
A contract in which unequal amounts or values are exchanged. The premium paid by
the insured is small in relation to the amount that will be paid by the insurer in the event
of loss.
, Alien Insurer
An insurance company that is incorporated outside the United States.
Apparent Authority
The appearance or the assumption of authority based on the actions, words, or deeds
of the principal or because of circumstances the principal created.
Appraisal
An assessment of property to determine either the correct amount of insurance to be
written or the amount of loss to be paid.
Arbitration
Method of claim settlement used when the insured and insurer cannot agree upon the
amount of the loss.
Assignment
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.
Authorized Insurer
An insurance company that has qualified and received a Certificate of Authority from the
Department of Insurance to transact insurance in the state.
Auto
A land motor vehicle, trailer or semi-trailer designed for use on public roads, including
attached machinery or equipment; auto does not include mobile equipment.
Bailee
A person or entity that has possession of personal property entrusted to him/her by the
owner. For example, a television repair person that has possession of a customer's
television would be a bailee.
Beneficiary
The person who receives the benefits from the policy of insurance.
Binder
A temporary contract of insurance issued by an insurer or its agent that places
insurance in effect prior to the policy being issued
Blanket Bond
This type of bond covers losses caused by dishonest employees.
Blanket Insurance
A single property insurance policy that provides coverage for multiple classes of
property at one location, or provides coverage for one or more classes of property at
multiple locations.
Bodily Injury Liability
Legal liability arising from physical trauma to a person or death arising from the
negligent or purposeful act and omissions by an insured.
Boycott
An unfair trade practice in which one person refuses to do business with another until
he or she agrees to certain conditions.
Burglary
The forced entry into another's premises with felonious intent.
Cancellation
