LIMITED LINES- PRACTICE QUESTIONS FULLY SOLVED (GRADED A+)

LIMITED LINES- PRACTICE QUESTIONS FULLY SOLVED (GRADED A+) RISK - Answers IS THE CHANCE OF A FINANCIAL LOSS INDEMNITY - Answers RESTORE AND INSURE TO THE SAME FINANCIAL CONDITION THEY WERE IN PRIOR TO THE LOSS PERIL - Answers A CAUSE OF LOSS LOSS - Answers ANY REDUCTION IN QUALITY QUANTITY OR VALUE LOSS RATIO - Answers RATIO OF LOSSES PAID VS TOTAL PREMIUMS RECEIVED STATUE OF LIMITATIONS - Answers TIME LIMITED ESTABLISHED BOOK OF BUSINESS - Answers AGENT OR INSURANCE COMPANY'S CUSTOMERS AND POLICYHOLDERS ARBITRATION - Answers USED TO RESOLVE CLAIMS DISPUTES UMPIRE SUBROGATION - Answers RIGHT OF RECOVERY- IT KEEP THE INS. FROM COLLECTION TWICE PROOF OF LOSS - Answers DOC MUST BE SUBMITTED AFTER A LOSS WITHIN 91 DAYS ACTUAL CASH VALUE - Answers REPLACEMENT COST MINUS DEPRECIATION AGREED VALUE - Answers VALUES ARE AGREED ON BETWEEN THE INSURED AND THE INSURER AT THE SAME TIME THE POLICY IS ISSUED Subrogation - Answers Right of recovery Pro Rate - Answers Returned premiums Replacement Cost - Answers The current price to replace property with out depreciation Market Value - Answers A willing buyer and willing seller that agree on amount on a piece of property Representation - Answers written/oral statement made by the insured, person buying insurance represents himself. Misrepresentation - Answers false statement made by the insured. Customer misrepresented himself. If related to the risk this is known as material misrepresentation and will void a policy. Warranties - Answers insured promise relating to the nature of the risk, if breach of warranty occurs, it can void a policy. Concealment - Answers failure to disclose known facts, can void a policy Fraud - Answers intentional perversion of the truth, can void a policy. Admitted Insurer - Answers This insurer is authorized, they have been granted a Certificate of Authority from the Department of Insurance, they meet all guidelines and are a member of the Guaranty Association. Non Admitted - Answers This insurer is unauthorized, they do not qualify for a Certificate of Authority, they meet some but not all requirements, however they can still do business in the state. Often called SURPLUS LINE INSURANCE companies. Mutual Companies - Answers are owned by policy holders Risk Retention Groups - Answers Liability Insurance companies owned by its policyholders who retain the risk. Membership to those with similar risk. Stock Companies - Answers are owned by stockholders Purchasing Groups - Answers groups main purpose is to purchase insurance on a group basis for its members who have similar or related liability exposures arising out of common business, product, or trade. Lloyd's Plan - Answers same regulation as others, but does not apply when it comes to rate regulations. Words LLOYDS must be in their names. Can't cover life insurance and are generally run by an attorney and owners are underwriters. Reinsurance - Answers insurance for insurance companies, it allows the insurer to sell part of the risk they have assumed from policy holders, writing more insurance. this protects from large losses that would not be able to be handled on its own. Avoidance - Answers elimate the exposure, underwriting rejects a policy. Retention - Answers insured assumes all or part of the risk, deductible.