USAA Licensing Exam

Law of Large numbers - ans-Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest - ans-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 - ans-Chance of loss; uncertainty of loss Speculative Risk - ans-Involves the simultaneous chance of gain or loss: is not insurable Pure Risk - ans-a risk that presents the chance of loss but no opportunity for gain (insurable) What are two examples of speculative risk? - ans-Gambling Investing Consideration - ans-An exchange of value between parties to a contract What is Estopple? - ans-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 - ans-Insured or prospect giving incorrect material information to the insurer, this voids coverage