USAA Licensing Exam || with 100% Verified Solutions.

Law of Large numbers correct answers Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest correct answers Proof that someone stands to lose financially if a loss occurs; must exist at the time of the loss in property and casualty insurance Risk correct answers Chance of loss; uncertainty of loss Speculative Risk correct answers Involves the simultaneous chance of gain or loss: is not insurable Pure Risk correct answers a risk that presents the chance of loss but no opportunity for gain (insurable) What are two examples of speculative risk? correct answers Gambling Investing Consideration correct answers An exchange of value between parties to a contract What is Estopple? correct answers When an agent tells an insured/makes the statement there is coverage for a loss when there is no such coverage, then the insurer is prevented from denying the claim as a result of what precedent? Material Misrepresentation correct answers Insured or prospect giving incorrect material information to the insurer, this voids coverage Warranty correct answers A written condition in the policy that must be true at the time of the loss Unfair Claim Settlement correct answers An adjuster intentionally lowballs the claim settlement by offering less than the amount owed to the insured Unfair Claim Settlement Practices Act correct answers An Agent collects a premium for a policy, but does not send it to the company and allows a policy to be canceled Unfair Claims Settlement Practices Act correct answers The insurance company fails to adopt reasonable standards for processing claims Unfair Claim Settlement correct answers If an adjuster were to deny a claim without conducting a reasonable investigation. This would be an example of what type of claim settlement violation? Supplemental Coverages correct answers The insurance company defends the insured for a suit arising out of a covered claim