Florida Insurance Exam 100% questions and correct answers

Risk - ANSWERS the chance of financial loss Risk is NOT the loss itself, but the _________ of loss. - ANSWERS CHANCE Policy - ANSWERS a written contract for effecting insurance and includes Clauses, Riders, endorsements, and papers which are part of the contract Insurance - ANSWERS a contract where one undertakes to indemnify another or pay a specific amount determined on contingencies Binders - ANSWERS temporary insurance which can be made orally or written property insurance - ANSWERS where payment is made directly to the insured or other named interest liability insurance - ANSWERS where payment is made on behalf of the insured to another Indemnity contract - ANSWERS one-party should be put back in the same Financial condition they were before the loss. Never profit from A Loss. replacement cost - ANSWERS given new for old agreed value - ANSWERS specific amount agreed in advance Florida value policy law - ANSWERS paid limit for total loss liability - ANSWERS pays amount that exceeds insured's resources insurable interest - ANSWERS insured would suffer economic loss peril - ANSWERS a contingency that may cause a loss example Wind, Fire, theft hazard - ANSWERS a condition that increases the likelihood of a loss from a covered peril physical hazard - ANSWERS physical characteristics that increase the probability and severity of loss example ice-covered steps moral hazard - ANSWERS intentional loss example steal from employer Morale hazard - ANSWERS accident prone or carelessness example did not lock the car door proximate cause - ANSWERS root cause a doctrine that states when there is an unbroken connection between An Occurrence and damage that grows out of the occurrence, then the resultant damage is all part of the occurrence. direct loss - ANSWERS physical harm to tangible property indirect loss - ANSWERS economic loss which flows as a consequence of the direct loss example hotel stay after a fire actual cash value - ANSWERS is the current cost to replace the item minus depreciation replacement cost - ANSWERS is the actual cost to repair or replace property valued policy - ANSWERS is where the insurer agrees, in advance, that the covered limit applicable to the item will be considered its value. This applies to items where ACV or replacement cost is difficult to establish, such as with antiques or Fine Arts coinsurance - ANSWERS a method of encouraging the insured to accept the responsibility of ensuring for the amount close to the value of the property. Coinsurance is primarily used in commercial policies and values vary from 80 to 100% specific insurance - ANSWERS is coverage subject to separate limits such as each building or the contents of each building Blanket Insurance - ANSWERS a single amount of coverage that applies to two or more coverage items straight ductable - ANSWERS deduction of a flat amount percentage deductible - ANSWERS percentage of loss of the value of the property or a percentage of the policy limits example hurricane deductibles franchise deductible - ANSWERS no payment is made until the loss equals or exceeds a prescribed amount, then lost paid in full liability insurance - ANSWERS policies pay on behalf of the insured all sums the insured becomes legally obligated to pay as damages. It is referred to as a third party claim