Florida Property & Casualty Final Exam Well Answered 100% 2024.

Depreciation - Answer Reduction in value, particularly due to wear and tear. Exposure - Answer Susceptibility to risk. Implied Warranty - Answer A legal term meaning that a product is suitable for its intended purpose and that it fits an ordinary buyer's expectations. Insurance Policy - Answer a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events Insurer (principal) - Answer The company who issues an insurance policy Obsolescence - Answer Depreciation in the value of a property due to becoming outdated Premium - Answer The money paid to the insurance company for the insurance policy Insurance is - Answer The transfer of risk of loss. The cost of an insured's loss is transferred over to the insurer and spread among other insureds. Insurance - Answer is a transfer of risk of loss from an individual or a business entity to an insurance company, which, in turn, spreads the costs of unexpected losses to many individuals. If there were no insurance mechanism, the cost of a loss would have to be borne soley by the individual who suffered the loss. The Law of Large Numbers states that - Answer the larger the number of people with a similar exposure to loss, the more predictable actual losses will be. This is the statistical prediction of loss upon which insurance rates are calculated.