Personal Lines Insurance Test – Questions With
Fully Explained Solutions
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Terms in this set (288)
Risk _________ is when one takes action to Reduction
prevent or reduce potential loss.
When the number of similar units Large Numbers
increases, the predictability of the loss
improves according to the rule of _____
________.
The insuring of risks that are more Adverse Selection
prone to losses than average risks is
known as?
A ___________ contract is an arrangement Reinsurance
where one insurer transfers or shares
risks with another insurer.
_____________ Reinsurance is accepted or Facultative
rejected by a case by case basis.
The fact that an insured would profit Indemnity
from a loss, would be a violation of
the principle of ___________.
The determination of acceptable risks Underwriter
is the primary function of the ___________ .
Underwriters like to select insureds True
who's actual losses will be similar to
expected losses. True or False?
,When rates cannot be used until they Prior Approval
are improved by the department or
division of insurance, they are called
____ ________ rates.
The termination of a policy by either Cancellation
the insured or insurer before its
expiration date is known as ___________.
When the insurer cancels a property Pro Rata
policy, the unearned premium is
returned ___ ____.
When an insured requests Short Rate
cancellation of a policy, the unearned
premium is refunded to the insured on
a _____ _____.
A fire is considered to be a _____ of a Cause
potential loss.
A document that provides temporary Binder
insurance coverage until a policy is
issued is known as a ______.
The process by which a disputed claim Arbitration
is decided by a neutral third party is
known as ___________.
_________ _________ is a situation where Concurrent Causation
there are two causes resulting in a
loss, with one of the causes excluded
and the other cause of loss not
excluded.
If two or more policies provide Concurrent
identical coverage for the same risk,
the policies are deemed to be __________.
,Policy A is written for $100,000, and an A= $20,000 ; B= $0
excess Policy B is written for $200,000
on the same property. In the event of
a $20,000 loss, how much will each
policy pay?
A building that has neither occupants Vacant
nor personal property is ______.
When property is damaged by fire, Direct
the loss is said to be a(n) ______ loss.
If a fire on a premises caused a power Indirect Loss
outage, which caused meat in the
freezer to spoil, would the meat
spoilage be considered a direct loss
or indirect loss?
Open peril policies include losses True
caused by theft. True or False?
If a property owner does not desire Replacement Cost
any deduction for depreciation
following a covered loss, he/she
should purchase a ___________ ____ policy.
For replacement cost coverage to 80
apply in dwelling policies, the insured
must carry insurance at least equal to
____% of the cost of replacement of the
building.
Would a stated amount method of No
valuation likely be used when insuring
gold bullion?
, An ____ policy is one that the value of Open
the subject matter is not agreed upon,
but is left to be ascertained in case of
loss.
A valued policy is one that expresses True
on it's face an agreement that the
thing insured is valued at a specific
sum. True or False?
Insuring more than one property on Blanket
one policy for a single amount of
insurance that applies to all properties
covered under the policy is known as
_______ coverage.
The name of the insured is found on True
the declarations page of the policy.
True or False?
What part or portion of a property Declarations
policy contains the effective or
expiration dates of the policy?
Are the insurer's limits of insurance No
amount stated in the conditions part
or portion part of the policy?
The __________ part or portion of a Conditions
property policy sets forth the rights,
rules, duties, and obligations of the
insurer and insured to be followed
throughout the policy period.
The ______________ Clause allows insurers Liberalization
to automatically broaden coverage
without endorsement on existing
policies with no increase in premium.
Fully Explained Solutions
Save
Terms in this set (288)
Risk _________ is when one takes action to Reduction
prevent or reduce potential loss.
When the number of similar units Large Numbers
increases, the predictability of the loss
improves according to the rule of _____
________.
The insuring of risks that are more Adverse Selection
prone to losses than average risks is
known as?
A ___________ contract is an arrangement Reinsurance
where one insurer transfers or shares
risks with another insurer.
_____________ Reinsurance is accepted or Facultative
rejected by a case by case basis.
The fact that an insured would profit Indemnity
from a loss, would be a violation of
the principle of ___________.
The determination of acceptable risks Underwriter
is the primary function of the ___________ .
Underwriters like to select insureds True
who's actual losses will be similar to
expected losses. True or False?
,When rates cannot be used until they Prior Approval
are improved by the department or
division of insurance, they are called
____ ________ rates.
The termination of a policy by either Cancellation
the insured or insurer before its
expiration date is known as ___________.
When the insurer cancels a property Pro Rata
policy, the unearned premium is
returned ___ ____.
When an insured requests Short Rate
cancellation of a policy, the unearned
premium is refunded to the insured on
a _____ _____.
A fire is considered to be a _____ of a Cause
potential loss.
A document that provides temporary Binder
insurance coverage until a policy is
issued is known as a ______.
The process by which a disputed claim Arbitration
is decided by a neutral third party is
known as ___________.
_________ _________ is a situation where Concurrent Causation
there are two causes resulting in a
loss, with one of the causes excluded
and the other cause of loss not
excluded.
If two or more policies provide Concurrent
identical coverage for the same risk,
the policies are deemed to be __________.
,Policy A is written for $100,000, and an A= $20,000 ; B= $0
excess Policy B is written for $200,000
on the same property. In the event of
a $20,000 loss, how much will each
policy pay?
A building that has neither occupants Vacant
nor personal property is ______.
When property is damaged by fire, Direct
the loss is said to be a(n) ______ loss.
If a fire on a premises caused a power Indirect Loss
outage, which caused meat in the
freezer to spoil, would the meat
spoilage be considered a direct loss
or indirect loss?
Open peril policies include losses True
caused by theft. True or False?
If a property owner does not desire Replacement Cost
any deduction for depreciation
following a covered loss, he/she
should purchase a ___________ ____ policy.
For replacement cost coverage to 80
apply in dwelling policies, the insured
must carry insurance at least equal to
____% of the cost of replacement of the
building.
Would a stated amount method of No
valuation likely be used when insuring
gold bullion?
, An ____ policy is one that the value of Open
the subject matter is not agreed upon,
but is left to be ascertained in case of
loss.
A valued policy is one that expresses True
on it's face an agreement that the
thing insured is valued at a specific
sum. True or False?
Insuring more than one property on Blanket
one policy for a single amount of
insurance that applies to all properties
covered under the policy is known as
_______ coverage.
The name of the insured is found on True
the declarations page of the policy.
True or False?
What part or portion of a property Declarations
policy contains the effective or
expiration dates of the policy?
Are the insurer's limits of insurance No
amount stated in the conditions part
or portion part of the policy?
The __________ part or portion of a Conditions
property policy sets forth the rights,
rules, duties, and obligations of the
insurer and insured to be followed
throughout the policy period.
The ______________ Clause allows insurers Liberalization
to automatically broaden coverage
without endorsement on existing
policies with no increase in premium.
