Texas Adjuster Study Guide| 367 QUESTIONS| ANSWERS Updated

Texas Adjuster Study Guide| 367 QUESTIONS| ANSWERS PERILS Correct Answer: A CAUSE OF PROPERTY LOSSES UNDER AN INSURANCE CONTRACT EX: WINDSTORM, HURRICANE, EXPLOSION, COLLAPSE OF BUILDING, VANDALISM, ACCIDENTAL DISCHARGE, AND THEFT LAW OF LARGE NUMBERS Correct Answer: A FUNDAMENTAL CONCEPT IN STATISTICS AND PROBABILITY THAT DESCRIBES HOW THE AVERAGE OF A RANDOMLY SELECTED LARGE SAMPLE FROM A POPULATION. IT BASICALLY RELIES ON THE PRINCIPLE THAT THE LARGER THE POOL, THE MORE PREDICTABLE THE AMOUNT OF LOSSES WILL BE IN A GIVEN PERIOD PRINCIPLE OF INDEMNITY Correct Answer: IS AN INSURANCE PRINCIPLE STATING THAT AN INSURED MAY NOT BE COMPENSATED BY INSURANCE COMPANY IN AN AMOUNT EXCEEDING THE INSURED'S ECONOMIC LOSS. LIMITS OF LIABILITY Correct Answer: THE MAXIMUM AMOUNT THAT AN INSURANCE POLICY WILL PAY. IT IS SPECIFIED ON THE POLICY DECLARATION PAGE. PROPERTY INSURANCE Correct Answer: COVERAGE FOR REAL AND PERSONAL PROPERTY AGAINST LOSS OR DAMAGE FROM PERILS INSURED AGAINST. LOSS SETTLEMENT Correct Answer: THE PROCESS USED TO DETERMINE THE AMOUNT OF THE LOSS ACTUAL CASH VALUE Correct Answer: THE VALUE OF THE PROPERTY BASED ON THE CURRENT COST TO REPLACE IT MINUS DEPRECIATION. AGREED VALUE Correct Answer: THE AMOUNT THAT THE INSURED AND INSURER AGREE UPON DURING THE TIME OF POLICY INCEPTION. REPLACEMENT COST Correct Answer: THE COST ASSOCIATED WITH REPLACING PROPERTY AT CURRENT MARKET PRICES MARKET VALUE Correct Answer: THE AMOUNT THAT THE PROPERTY IS WORTH IN A COMPETITIVE MARKET. THIS AMOUNT IS ACCEPTED BY THE BUYER AND SELLER. TORT Correct Answer: IS A WRONG THAT INVOLVES A BREACH OF CIVIL DUTY OWED TO SOMEONE ELSE. THIS BREACH DETERMINES IF THAT PERSON IS NEGLIGENCE. ELEMENTS USED TO DETERMINE NEGLIGENCE Correct Answer: A DUTY OWED, A DUTY BREACHED, PROXIMATE CAUSE, AND DAMAGES METHODS TO DETERMINE LOSS ARE: Correct Answer: ACV, MARKET VALUE, REPLACEMENT COST, AGREED VALUE CASUALTY INSURANCE Correct Answer: PROTECTS A PERSON FROM FINANCIAL LOSS ARISING FROM BODILY INJURY OR PROPERTY DAMAGE TO OTHERS HAZARD Correct Answer: IS A SITUATION THAT POSES A LEVEL OF THREAT TO LIFE, HEALTH, PROPERTY, OR ENVIRONMENT. INDIRECT LOSS Correct Answer: TYPE OF LOSS THAT DOES NOT RESULT FROM DIRECT DAMAGE OF A COVERED CAUSE OF LOSS OR PERIL BUT IS INSTEAD A CONSEQUENCE OF THE DIRECT DAMAGE LOSS. DIRECT LOSS Correct Answer: DIRECT PHYSICAL LOSS TO PROPERTY INSURING AGREEMENT Correct Answer: THIS SECTION OF THE INSURANCE POLICY SPECIFIES WHAT THE INSURANCE WILL PROVIDE COVERAGE FOR IN EXCHANGE FOR PREMIUM PAYMENTS BY THEIR CUSTOMER. DEDUCTIBLE Correct Answer: THE AMOUNT THE INSURED MUST PAY IN A LOSS BEFORE ANY PAYMENT IS DUE FROM THE INSURANCE COMPANY. WHERE IS A HOMEOWNER PERCENTAGE DEDUCTIBLE ALWAYS TAKEN FROM? Correct Answer: COVERAGE A STRUCTURE POLICY LIMITS OF LIABILITY THAT IS USED ON THE DECLARATION PAGE. CANCELLATION Correct Answer: IS THE TERMINATION OF AN INSURANCE POLICY BY EITHER SIDE AND IT MUST BE DONE IN WRITING LIABILITY Correct Answer: A PERSON IS LEGALLY LIABLE FOR AN ACCIDENT IF THAT PERSON IS FOUND RESPONSIBLE FOR BODILY INJURY OR PROPERTY DAMAGE TO ANOTHER PARTY. NEGLIGENCE Correct Answer: THE FAILURE TO EXERCISE THE CARE THAT A REASONABLY PRUDENT PERSON CAN BE CHARACTERIZED BY THE AVERAGE PERSON. ADDITIONAL LIVING EXPENSES Correct Answer: CHARGES COVERED BY HOMEOWNERS POLICY OVER AND ABOVE POLICY HOLDERS CUSTOMARY LIVING DUE TO DAMAGE BY A COVERED PERIL AND MAKES THE HOME TEMPORARY UNINHABITABLE. EXPOSURE Correct Answer: THE MEASURE OF THE POSSIBILITY OF THE LOSS INSURED Correct Answer: THE PARTY TO AN INSURANCE ARRANGEMENT THAT HAS AN INSURABLE INTEREST IN THE PROPERTY THAT IS BEING INSURED. INSURER Correct Answer: INSURANCE COMPANY LOSS HISTORY Correct Answer: IS THE INSURED HISTORY OF LOSSES WITH OTHER COMPANIES. INSURANCE COMPANY VIEWS THIS AS INDICATION OF INSURED PROPENSITY FOR A CLAIM IN FUTURE. NOTICE OF LOSS Correct Answer: NOTICE REQUIRED BY THE INSURANCE COMPANY IMMEDIATELY AFTER AN INCIDENT. POLICY HOLDER RESPONSIBILITY AFTER A LOSS DEPRECIATION Correct Answer: ACT OF LOWERING AN ITEM DUE TO VALUE WEAR AND TEAR IT IS BASED ON AGE, CONDITION, AND LIFE EXPECTANCY. PUNITIVE DAMAGE Correct Answer: THE AMOUNT AWARDED BY THE COURT WHICH IS INTENDED TO REFORM OR DETER THE DEFENDANT FROM ENGAGING IN SIMILAR CONDUCT IN THE FUTURE COMPARATIVE NEGLIGENCE Correct Answer: IS A PARTIAL LEGAL DEFENSE THAT REDUCES THE AMOUNT OF DAMAGES THAT A PERSON CAN RECOVER BASED UPON THE AMOUNT THAT THIS PERSON'S OWN NEGLIGENCE CONTRIBUTED TO THE LOSS CONTRIBUTORY NEGLIGENCE Correct Answer: IS A LAW DEFENSE WHERE A PERSON NEGLIGENCE CONTRIBUTED TO THE HARM THAT HE OR SHE SUSTAINED ASSUMPTION OF RISK Correct Answer: A doctrine under which a plaintiff may not recover for injuries or damage suffered from risks he or she knows of and has voluntarily assumed ADVERSE SELECTION Correct Answer: THE TENDENCY OF INSURED'S WHO PRESENT A HIGHER PROBABILITY OF LOSS TO PURCHASE OR RENEW INSURANCE MORE OFTEN THAN THOSE WHO PRESENT A LOWER PROBABILITY ATTRACTIVE NUISANCE Correct Answer: A dangerous place, condition, or object that is particularly attractive to children. ACCIDENT Correct Answer: UNFORESEEN, UNINTENDED EVENT, SOMETHING UNEXPECTED OCCURRENCE Correct Answer: AN EVENT THAT RESULTS IN AN INSURED LOSS WHICH RESULTS IN BODILY INJURY OR DAMAGES BETTERMENT Correct Answer: IMPROVEMENT OF PROPERTY THAT PUTS IT IN A BETTER CONDITION THAN IT WAS BEFORE THE OCCUPANCY OR LOSS ALL RISK INSURANCE Correct Answer: "open perils" insurance - protecting the insured from loss arising from any peril other than those perils specifically excluded by name APPRAISAL Correct Answer: IS A FORM OF DISPUTE RESOLUTION THAT OCCURS WHEN THERE IS A DISPUTE BETWEEN THE INSURED AND THE INSURANCE COMPANY REGARDING THE AMOUNT OF THE CLAIM OR LOSS. BOTH PARTIES HIRE AN APPRAISAL AND IF CANT DECIDE THEN THEY WILL HIRE AN UMPIRE BREACH OF CONTRACT Correct Answer: THE FAILURE TO COMPLY WITH TERMS OR CONDITIONS OF AN INSURANCE POLICY THAT MAY RESULT IN RESTRICTED COVERAGE OR VOID THE POLICY. BODILY INJURY Correct Answer: Physical pain, illness or any impairment of physical condition CONCEALMENT Correct Answer: The withholding of known facts which, if material, can void a contract or not pay out on claims related to that material information DAMAGES Correct Answer: THE AMOUNT CLAIMED BY OR AWARDED TO AN INJURED PARTY AS COMPENSATION FOR LIABILITY OWING TO BODILY INJURY OR PROPERTY DAMAGE FRAUD Correct Answer: INTENTIONAL LYING OR MISREPRESENTATION BY POLICY HOLDER OR CLAIM ADJUSTERS OF A MATERIAL FACT IN ORDER TO INFLATE A CLAIM PAYMENT OR RECEIVE A CLAIM PAYMENT THAT WOULD OTHERWISE NOT BE PAID OR VOID THE CONTRACT INCURRED EXPENSES Correct Answer: EXPENSES THAT HAVE ALREADY BEEN SUSTAINED AND HAVE NOT BEEN PAID EX: AN ADDITIONAL LIVING EXPENSE CLAIM IS A REIMBURSEMENT OF INCURRED EXPENSES. LOSS PAYEE Correct Answer: the person designated on an insurance policy as the one to be paid in case the property is damaged/destroyed CLAIMANT Correct Answer: IS A PARTY WHO MAKES A CLAIM CO INSURANCE CLAUSE Correct Answer: A clause in an insurance policy under which the insured agrees to maintain insurance equal to some specified percentage of the property value or otherwise to assume a portion of any loss COLLISION Correct Answer: COVERAGE THAT PAYS FOR DAMAGES TO YOUR CAR WITHOUT REGARDS TO WHO CAUSED THE ACCIDENT. Covers a collision with another object, car, or from a rollover.