p and c alabama
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1. risk: possibility loss will occur
2. insurance: transfer of risk
3. what are the two types if risk: speculative and pure
4. speculative risk: chance of loss or gain and is not insurable
5. pure risk: chance of loss only; insurable
6. peril: cause of loss
7. direct loss: a financial loss that results from the physical damage, destruction, or theft of the property
8. indirect loss: Loss that is a result or consequence of a direct loss
9. hazard: anything that increases the likelihood of loss through peril
10. moral hazard: dishonesty or character defects in an individual that increase the frequency or severity of loss
11. morale hazard: A condition of carelessness or indifference that increases the frequency or severity of loss.
12. first party loss: Property insurance loss, covers "my stuff"
13. third party loss: Liability loss, casualty
14. Declorations page: who, what, when, where
15. insuring agreements: promise to pay and perils covered
16. conditions: rules for the policy
17. endorsments: Changes to the original policy
18. exclusions: items not covered
19. insurable risk: risk that meets an insurance company's criteria for insurance coverage
20. stock insurer: -Owned by stockholders
-Dividend is not guaranteed
-Dividend is paid to stockholder
-Dividend is taxable to stockholders
-Issues non-participating policies
21. Mutual Insurer: -owned by policyholders (customers)
-dividend is not guaranteed
-dividend is paid to policyholder
-dividend is not taxable; considered refund of premium
-issues participating policies
22. Llyod's Associations: insurance provided by individual underwriters not companies and insure unusual
risks
23. Domestic Insurer: An insurance company that conducts business in the state of incorporation.
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, p and c alabama
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24. Alien Insurer: An insurance company that is incorporated outside the United States.
25. Foreign Insurer: An insurance company that is incorporated in another state.
26. admitted / authorized: state requires the insurance company to have a certificate of authority
27. unauthorized: no certificate of authority, sell surplus lines ins. products
28. agency: insurance agent acts on behalf of the principle (insurance company)
29. law of agency: The law that governs the relationship between a principal and his or her agent.
30. Elements of legal contract: CLOAC
Consideration
Legal Purpose
Offer
Acceptance
Competent Parties
31. representation: a statement believed to be true to the best of one's knowledge
32. misrepresentation: a statement, written or spoken, that is false or misleading; can be actionable if also
found to be fraudulent
33. material misrepresentation: A statement that, if discovered, would alter the underwriting decision of
the insurance company.
34. concealment: failure to disclose known facts
35. underwriting: the process of selecting, classifying, and pricing applicants for insurance
36. loss ratio: - Compares company's operations year over year
- Incurred losses / earned premiums
37. expense ratio: The cost of doing business.
Expense Ratio = Underwriting Expenses/Written Premium
38. combined ratio: loss ratio + expense ratio
39. judgement rating: each exposure is individually evaluated, and the rate is determined largely by the
judgement of the underwriter
40. manual rating: set rates for specific risk classes
41. experience rating: Rating system that bases insurance rates on claims history
42. named peril: A specific cause of loss listed and described in an insurance policy
43. open perils: All perils are covered unless specifically excluded
44. extended coverage perils: WCSHAVVER & V&MM
Wind
2/6
Study online at https://quizlet.com/_fjp3e8
1. risk: possibility loss will occur
2. insurance: transfer of risk
3. what are the two types if risk: speculative and pure
4. speculative risk: chance of loss or gain and is not insurable
5. pure risk: chance of loss only; insurable
6. peril: cause of loss
7. direct loss: a financial loss that results from the physical damage, destruction, or theft of the property
8. indirect loss: Loss that is a result or consequence of a direct loss
9. hazard: anything that increases the likelihood of loss through peril
10. moral hazard: dishonesty or character defects in an individual that increase the frequency or severity of loss
11. morale hazard: A condition of carelessness or indifference that increases the frequency or severity of loss.
12. first party loss: Property insurance loss, covers "my stuff"
13. third party loss: Liability loss, casualty
14. Declorations page: who, what, when, where
15. insuring agreements: promise to pay and perils covered
16. conditions: rules for the policy
17. endorsments: Changes to the original policy
18. exclusions: items not covered
19. insurable risk: risk that meets an insurance company's criteria for insurance coverage
20. stock insurer: -Owned by stockholders
-Dividend is not guaranteed
-Dividend is paid to stockholder
-Dividend is taxable to stockholders
-Issues non-participating policies
21. Mutual Insurer: -owned by policyholders (customers)
-dividend is not guaranteed
-dividend is paid to policyholder
-dividend is not taxable; considered refund of premium
-issues participating policies
22. Llyod's Associations: insurance provided by individual underwriters not companies and insure unusual
risks
23. Domestic Insurer: An insurance company that conducts business in the state of incorporation.
1/6
, p and c alabama
Study online at https://quizlet.com/_fjp3e8
24. Alien Insurer: An insurance company that is incorporated outside the United States.
25. Foreign Insurer: An insurance company that is incorporated in another state.
26. admitted / authorized: state requires the insurance company to have a certificate of authority
27. unauthorized: no certificate of authority, sell surplus lines ins. products
28. agency: insurance agent acts on behalf of the principle (insurance company)
29. law of agency: The law that governs the relationship between a principal and his or her agent.
30. Elements of legal contract: CLOAC
Consideration
Legal Purpose
Offer
Acceptance
Competent Parties
31. representation: a statement believed to be true to the best of one's knowledge
32. misrepresentation: a statement, written or spoken, that is false or misleading; can be actionable if also
found to be fraudulent
33. material misrepresentation: A statement that, if discovered, would alter the underwriting decision of
the insurance company.
34. concealment: failure to disclose known facts
35. underwriting: the process of selecting, classifying, and pricing applicants for insurance
36. loss ratio: - Compares company's operations year over year
- Incurred losses / earned premiums
37. expense ratio: The cost of doing business.
Expense Ratio = Underwriting Expenses/Written Premium
38. combined ratio: loss ratio + expense ratio
39. judgement rating: each exposure is individually evaluated, and the rate is determined largely by the
judgement of the underwriter
40. manual rating: set rates for specific risk classes
41. experience rating: Rating system that bases insurance rates on claims history
42. named peril: A specific cause of loss listed and described in an insurance policy
43. open perils: All perils are covered unless specifically excluded
44. extended coverage perils: WCSHAVVER & V&MM
Wind
2/6
