Exam FX (PA Property and Casualty - Ch. 2 Property & Casualty Insurance Basics) Questions With Complete Solutions

Earned Premium correct answer: Portion of the premium paid in advance that now belongs to the insurer because it applies to the elapsed part of the policy. Exposure Units correct answer: used as a measure of the rating units or the premium base of a risk Exposure Unit Formula correct answer: exposure units x rate = premium homogeneity correct answer: the degree to which items are similar implied warranty correct answer: a legal term meaning a product is suitable and lives up to buys expectations Inception correct answer: Date the insurance policy goes into effect obsolescence correct answer: depreciation in the value of a property due to becoming OUTDATED Insurable Interest correct answer: This is the financial interest an insured has in a person or property and if they were to experience damage to either of those things they would incur financial loss. Elements of Insurable Risk correct answer: Financial, Blood, Business What must exist at the time of a loss in order to obtain reimbursement or indemnity in insurance cor