NJ Property license 1Test Well Solved 2023

NJ Property license 1Test Well Solved 2023What are the methods of managing risk? - ANSWER Avoidance, transfer, sharing, retention, reduction What is the fee a person pays an insurance company to receive coverage? - ANSWER Premium Self -insuring is typically used for what type of insurance? - ANSWER Workers compensation A tornado that destroys a property would be an example of what? - ANSWER Peril A state-issued document empowering an insurance company to become an admitted insurer is called what? - ANSWER Certificate of Authority Why are the three types of hazards? - ANSWER Physical, moral, and morale The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what? - ANSWER Loss Insurers are classified according to their domicile. What are the three types of insurers? - ANSWER Domestic, foreign, and alien A person who does not lock the doors to his or her house shows an indifferent attitude. What type of hazard does this represent? - ANSWER Morale A situation in which a person can experience only a loss and no gain presents what type of risk? - ANSWER Pure risk What are the four elements of an insurance contract? - ANSWER Agreement (offer and acceptance), consideration, competent parties, and legal purpose What type of insurer is formed under the laws of another state? - ANSWER Foreign What are the five characteristics of an ideally insurable risk? - ANSWER Loss must be 1) due to chance 2) definite and measurable, 3) statistically predictable, 4) not catastrophic, and 5) coverage cannot be mandatory. What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? - ANSWER Law of large numbers