Texas All-Lines Adjuster Pre-Licensing

Texas All-Lines Adjuster Pre-Licensing Chapter 1 - ANS insurance - ANSfinancial took that protects individual and organizations from unforeseen and extraordinary financial losses by transferring risk to another party insured - ANSindividual or organization that pays premiums in exchange for protection insurer - ANScompany, group, or government agency offering financial protection how does insurance work? - ANSinsured pays premium insurer promises to pay for specific losses if they occur insurer's promise gives peace of mind to insured principle of indemnity - ANSwhen a loss occurs, an individual should be restored to the approximate financial condition he was in before the loss, no more and no less Q1: How can insurance companies afford to pay for an individual's catastrophic loss? - ANS Q1: The purpose of the principle of indemnity: - ANSprevents an insured from profiting from a loss Q1: Which of the following best defines premium? - ANSthe fee paid by the insured in exchange for the insurance policy Q1: What best describes insurance? - ANSan economic device used to protect against the risk of unforeseen and extraordinary financial loss Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his insurance company and $4000 from the other driver. By receiving profit from his loss, Mark could be in violation of: - ANSthe principle of indemnity he should be in the same financial condition. no better, no worse indemnification may include payment for: - ANSrepairs to property reimbursement for additional living expenses rental cars, hotels costs directly associated with a loss, as allowed under the policy legal contract/insurance policy is: - ANScontract to provide financial protection for a fee legally binding because it meets the 4 requirements of a legal contract What are the 4 requirements of a legal contract? - ANSagreement (offer and acceptance) consideration competent parties legal purpose agreement - ANSmutual consent between offeror and offeree acceptance criteria - ANSofferee communicates to the offeror his intent to enter into contract must be unconditional - the offeree accepts the terms proposed by the offeror original offeree is the only person who can legally accept the offer An offer may be terminated by: - ANSrevocation by offeror rejection by offeree time lapse termination by operation of law -either party dies or becomes disabled -performance of contract becomes illegal after the offer -subject matter is destroyed offer rejection - ANSexplicit rejection proposal of new offer counteroffer consideration - ANSall parties bring something of value competent parties - ANS18 years old, sober, and sane legal purpose - ANSno contracts for money laundering Q2: An offeree may legally reject a contract offer by any of the