AINS 101 | 56 Question with 100 % correct answers | Verified and latest

Actual cash value (ACV) - The cost to replace property with new property of like kind and quality less depreciation. Adverse selection - Insuring individuals with a high probability of loss at a cost lower than the insurer would normally charge for that risk because it wasn't aware of the actual risk involved. Binder - A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued. Book of business - A group of policies with a common characteristic, such as territory or type of coverage, or all policies written by a particular insurer or agency. Broker - An independent producer who represents insurance customers. Brokerage - Compensation in the form of a flat fee or a commission that is paid by the reinsurer to the reinsurance intermediary for services provided. Capacity - The amount of business an insurer is able to write, usually based on a comparison of the insurer's written premiums to its policyholders' surplus Catastrophe model - A type of computer program that estimates losses from future potential catastrophic events. Certificate of insurance - A brief description of insurance coverage prepared by an insurer or its agent and commonly used by policyholders to provide evidence of insurance. Claim - A demand by a person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy.