Washington State Insurance Exam / Questions with
Certified Solutions.
Terms in this set (122)
Apparent is the appearance or assumption of authority based on the
actions, words, or deeds of the principal or because of
circumstances the principal created.
Owned by the policyowner
and issue participating
policies. Policy owners are
entitled to dividends,
Mutual Company which are a return of excess premiums and are therefore non-taxable.
Dividends are not guaranteed.
Sharing A method of dealing with risk for a group of individual
persons or businesses with the same or similar exposure to
loss to share the losses that occur within that group. A
RECIPROCAL insurance exchange is a form of risk-sharing
arrangement.
Retention Is the planned assumption of risk by the insured through
the use of deductibles, co-payments, or selfinsurance. It is
also known as self-insurance when the insured accepts the
responsibility for the loss before the insurance company
pays.
Express Authority Is the AUTHORITY a principal intends to grant to an agent
by means of the agent's contract. It is the authority that
is written in the contract.
In order to be characterized as a pure risk, the loss must be
Insurable Risk due to chance, definite, measurable, and predictable, but
not catastrophic.
,Insurance Policy Section of an insurance policy that indicates the general
Conditions rules or procedures that the insurer and insured agree to
follow under the terms of the policy. Examples: Inspection
may be made as needed/ Changes to the policy must be
made by insurer and be in writing/ Liberalization clause/
Return of premiums, which dictates methods used.
Loss Costs Rating Type of rating: Method developed by the insurance services
office Inc. (ISO) that provides an insurer with that portion of
a rate that does not include provisions of expenses or profit
and are based on historical aggregate loss and loss
adjustment expenses projected through development to
their ultimate value and through trending to a future point
in time.
Strict Liability Is commonly applied in product liability cases. The
business is then liable for defective products, regardless
of fault or negligence.
Insuring Agreement The part of the policy structure that describes the insured
perils and the method of indemnification.
Conditions States the legal obligations and duties of the parties to the
contract.
Valued Policy Provides for payment of the full policy amount in the
event of a total loss WITHOUT regard to actual value or
depreciation.
Contributory Negligence In states that have this, the defendant must have been 100% at
fault for an accident and the claimant free of fault if the
claimant is to be successful in collecting damages.
A property policy with provisions agreed upon by the
insurer and insured as to the amounts of insurance that
Agreed Value represents a fair valuation for the property at the time the
insurance is written. The amount is paid in a loss, regardless
of the insured property's appreciation or depreciation.
, Includes those losses caused by continuous or repeated
Occurance exposure to conditions resulting in injury or damage to
property that is neither intended nor expected.
Consequential loss Also known as an indirect loss, is a second financial loss
caused by a covered direct loss.
Nonconcurrency Refers to other insurance written on the same risk, but not on
the same coverage basis.
Negligence Four essential elements: Duty, breach, injury, and unbroken
chain.
Stated Amount The value of the insured property is determined at the time the
policy is written. In the event of a loss, that amount is paid
without regard to any COINSURANCE provision. However, if the
loss is less than total, the insurer has salvage rights with the
insured having first right of refusal of the salvage.
Personal Property Property that is moveable
Real Property Property that is non-moveable
Components Factors that determine rates, including loss reserves, loss
adjusting expenses, operating expenses and profits.
Comparative Negligence Many states, by statute, require that damage be apportioned
based upon the degree of negligence of each party in an accident.
Assignment The transfer of a legal right or interest in an insurance policy.
In property and casualty insurance, assignments of policies
are usually valid only with the prior written consent of the
insurer. Example:
transferring a policy to a friend who will be taking over
renters insurance when you move out.
Certified Solutions.
Terms in this set (122)
Apparent is the appearance or assumption of authority based on the
actions, words, or deeds of the principal or because of
circumstances the principal created.
Owned by the policyowner
and issue participating
policies. Policy owners are
entitled to dividends,
Mutual Company which are a return of excess premiums and are therefore non-taxable.
Dividends are not guaranteed.
Sharing A method of dealing with risk for a group of individual
persons or businesses with the same or similar exposure to
loss to share the losses that occur within that group. A
RECIPROCAL insurance exchange is a form of risk-sharing
arrangement.
Retention Is the planned assumption of risk by the insured through
the use of deductibles, co-payments, or selfinsurance. It is
also known as self-insurance when the insured accepts the
responsibility for the loss before the insurance company
pays.
Express Authority Is the AUTHORITY a principal intends to grant to an agent
by means of the agent's contract. It is the authority that
is written in the contract.
In order to be characterized as a pure risk, the loss must be
Insurable Risk due to chance, definite, measurable, and predictable, but
not catastrophic.
,Insurance Policy Section of an insurance policy that indicates the general
Conditions rules or procedures that the insurer and insured agree to
follow under the terms of the policy. Examples: Inspection
may be made as needed/ Changes to the policy must be
made by insurer and be in writing/ Liberalization clause/
Return of premiums, which dictates methods used.
Loss Costs Rating Type of rating: Method developed by the insurance services
office Inc. (ISO) that provides an insurer with that portion of
a rate that does not include provisions of expenses or profit
and are based on historical aggregate loss and loss
adjustment expenses projected through development to
their ultimate value and through trending to a future point
in time.
Strict Liability Is commonly applied in product liability cases. The
business is then liable for defective products, regardless
of fault or negligence.
Insuring Agreement The part of the policy structure that describes the insured
perils and the method of indemnification.
Conditions States the legal obligations and duties of the parties to the
contract.
Valued Policy Provides for payment of the full policy amount in the
event of a total loss WITHOUT regard to actual value or
depreciation.
Contributory Negligence In states that have this, the defendant must have been 100% at
fault for an accident and the claimant free of fault if the
claimant is to be successful in collecting damages.
A property policy with provisions agreed upon by the
insurer and insured as to the amounts of insurance that
Agreed Value represents a fair valuation for the property at the time the
insurance is written. The amount is paid in a loss, regardless
of the insured property's appreciation or depreciation.
, Includes those losses caused by continuous or repeated
Occurance exposure to conditions resulting in injury or damage to
property that is neither intended nor expected.
Consequential loss Also known as an indirect loss, is a second financial loss
caused by a covered direct loss.
Nonconcurrency Refers to other insurance written on the same risk, but not on
the same coverage basis.
Negligence Four essential elements: Duty, breach, injury, and unbroken
chain.
Stated Amount The value of the insured property is determined at the time the
policy is written. In the event of a loss, that amount is paid
without regard to any COINSURANCE provision. However, if the
loss is less than total, the insurer has salvage rights with the
insured having first right of refusal of the salvage.
Personal Property Property that is moveable
Real Property Property that is non-moveable
Components Factors that determine rates, including loss reserves, loss
adjusting expenses, operating expenses and profits.
Comparative Negligence Many states, by statute, require that damage be apportioned
based upon the degree of negligence of each party in an accident.
Assignment The transfer of a legal right or interest in an insurance policy.
In property and casualty insurance, assignments of policies
are usually valid only with the prior written consent of the
insurer. Example:
transferring a policy to a friend who will be taking over
renters insurance when you move out.
