Florida ACA Claims Licensing
Exam
Insurance correct answerstransfer of risk by contract to insurers who agree
to indemnify insureds for losses
Risk correct answerschance of loss
pure risk correct answersonly outcomes are loss or no loss
personal risk correct answerspremature death, insufficient income,
poor health, unemployment
property risk correct answersloss of real property or personal property (on
the land not the land itself)
Liability risk correct answerssomething that results in loss to another (3rd
party buyout)
Controlling risk correct answersrisk management; minimal loss
speculative risk correct answerseither profit or loss is possible (NOT
insurable) indemnify correct answerscompensate for loss, damage, or injury;
reimburse; repay
Law of Large Numbers correct answersmust have a large pool of insureds to
be able to predict losses so that the outcomes will reflect the probability of
the results
Direct loss correct answersResults from the damage, destruction, or theft of
property by a covered peril
indirect loss correct answersa financial loss that results from the occurrence
of a direct physical damage or theft loss
When can there be a pay out on liability risk correct answersnegligence is
proven
negligence correct answersfailure to use due care; otherwise known as
the prudent person rule
Strict or Absolute Liability correct answersLiability assigned by statute
without regard for negligence (set by the state or industry, no allowable
defense)
Indemnity Principle correct answersone should be in approximately the
same position after a loss as he was before the loss
, Insurer correct answersA person or company that underwrites an
insurance risk; the party in an insurance contract undertaking to pay
compensation.
Insured correct answersone who is named or covered by insurance
Insurable interest correct answersmust exist at the time of loss and
usually means an economic or other interest in the event or in a particular
property ex: bank loans or mortgage companies
What is the measure of insurable interest correct answersthe extent to
which the insured might be damnified by loss, injury, or impairment
thereof
Policy correct answersa written document containing coverage, exclusions,
conditions and endorsements
Binder correct answerscan be oral or written and places the insurance "in
effect"
Requirements of a valid contract correct answersconsent of all parties
(offer and acceptance), valuable consideration (monetary exchange), all
parties must be of legal capacity (competent), and it must be for legal
purposes to be enforceable
Characteristics of an insurance contract correct answerspersonal,
conditional, contract of adhesion (gray area, will side on the behalf of the
insured), principle of indemnity, aleatory (exchange is not equal), unilateral
(payment for a promise)
Domestic insurance company correct answersA company that
resides and is incorporated under the laws of the state in which it
is operating
Foreign Insurance Company correct answersAn insurance company that is
incorporated outside the state where it is conducting business
Alien Insurance Company correct answersAn insurance company
incorporated outside the country
Peril correct answerssomething that causes a loss ex: Fire, lightening
Hazard correct answerssomething that increases the probability a loss
will occur or increases the severity
Physical hazard correct answersA physical characteristic that may
increase the likelihood of loss (wet floor, icy roads)
Moral hazard correct answersa conscious act that may cause a loss to occur
(deliberate theft)
Exam
Insurance correct answerstransfer of risk by contract to insurers who agree
to indemnify insureds for losses
Risk correct answerschance of loss
pure risk correct answersonly outcomes are loss or no loss
personal risk correct answerspremature death, insufficient income,
poor health, unemployment
property risk correct answersloss of real property or personal property (on
the land not the land itself)
Liability risk correct answerssomething that results in loss to another (3rd
party buyout)
Controlling risk correct answersrisk management; minimal loss
speculative risk correct answerseither profit or loss is possible (NOT
insurable) indemnify correct answerscompensate for loss, damage, or injury;
reimburse; repay
Law of Large Numbers correct answersmust have a large pool of insureds to
be able to predict losses so that the outcomes will reflect the probability of
the results
Direct loss correct answersResults from the damage, destruction, or theft of
property by a covered peril
indirect loss correct answersa financial loss that results from the occurrence
of a direct physical damage or theft loss
When can there be a pay out on liability risk correct answersnegligence is
proven
negligence correct answersfailure to use due care; otherwise known as
the prudent person rule
Strict or Absolute Liability correct answersLiability assigned by statute
without regard for negligence (set by the state or industry, no allowable
defense)
Indemnity Principle correct answersone should be in approximately the
same position after a loss as he was before the loss
, Insurer correct answersA person or company that underwrites an
insurance risk; the party in an insurance contract undertaking to pay
compensation.
Insured correct answersone who is named or covered by insurance
Insurable interest correct answersmust exist at the time of loss and
usually means an economic or other interest in the event or in a particular
property ex: bank loans or mortgage companies
What is the measure of insurable interest correct answersthe extent to
which the insured might be damnified by loss, injury, or impairment
thereof
Policy correct answersa written document containing coverage, exclusions,
conditions and endorsements
Binder correct answerscan be oral or written and places the insurance "in
effect"
Requirements of a valid contract correct answersconsent of all parties
(offer and acceptance), valuable consideration (monetary exchange), all
parties must be of legal capacity (competent), and it must be for legal
purposes to be enforceable
Characteristics of an insurance contract correct answerspersonal,
conditional, contract of adhesion (gray area, will side on the behalf of the
insured), principle of indemnity, aleatory (exchange is not equal), unilateral
(payment for a promise)
Domestic insurance company correct answersA company that
resides and is incorporated under the laws of the state in which it
is operating
Foreign Insurance Company correct answersAn insurance company that is
incorporated outside the state where it is conducting business
Alien Insurance Company correct answersAn insurance company
incorporated outside the country
Peril correct answerssomething that causes a loss ex: Fire, lightening
Hazard correct answerssomething that increases the probability a loss
will occur or increases the severity
Physical hazard correct answersA physical characteristic that may
increase the likelihood of loss (wet floor, icy roads)
Moral hazard correct answersa conscious act that may cause a loss to occur
(deliberate theft)
