Property and Casualty Insurance Basics Questions with Answers 100% Correct || (2024) Certified!!!

INSURABLE INTEREST - an economic interest in a property that must exist at the time of loss (you can insure the equity interest in your own home) UNDERWRITING - classifies the applicant based upon the underwriting requirements of the insurer; matches the risk presented with the premium charged by the insurer LOSS RATIO - percentage of claims paid in comparison to total premiums collected during a particular period of time RATES - set by the insurer at a level sufficient to pay claims and company expenses; in most states must be filed with Dept of Insurance JUDGMENT RATING - underwriter uses intuition and experience instead of a manual to determine rates MANUAL RATING - underwriter refers to rates determined by the insurer's actuaries based on the "law of large numbers" MERIT RATING - "manual" rates are modified by underwriter based on past loss experience or other factors unique to the risk involved (lower premiums are given to those clients who have few prior losses) RETROSPECTIVE RATING - the final premium is not determined until the end of the policy period and is based on the insured's own prior loss experience (subject to minimum and maximun premiums); often these are