1 Exampromax - Stuvia US
Virginia Property and Casualty Insurance
Questions and Answers 100% Correct Answers
Already Graded A+
Q: What is based on the principle of Risk Transfer
Ans: Spreading the results of a financial loss among many persons, so the cost to
any one person is small
Q: What kind of risk has an outcome that is uncertain?
Ans: Speculative Risk
Exampromax - Stuvia US
Q: What is the reason for a claim?
Ans: A loss is the reason a claim against an insurance company.
Q: What is the measure of a loss?
Ans: Exposure Units
Q: Name three types of hazards.
Ans: 1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
Q: What is a cause of a loss?
Ans: Perils are the causes of possible loss
Q: What is the common way to transfer risk?
Ans: The most common method of risk transfer is when a homeowner purchases
insurance on their home..
Q: Define adverse selection.
, 2 Exampromax - Stuvia US
Ans: Insuring risks more prone to losses than an average risk.
Q: What is the theory of probability that is the basis for insurance?
Ans: The Law of Large Numbers
Q: Who manages a Mutual Company
Ans: A Boar of Trustees
Q: What is high risk coverage purchased from an unauthorized company?
Ans: Surplus Lines Insurers
Q: How are insurance companies defined?
Exampromax - Stuvia US
Ans: Where they are located, chartered, or incorporated.
Q: What protects policy holders from an insurer's insolvency?
Ans: Property and Casualty Insurance Guaranty Association
Q: What must all insurers obtain to conduct insurance business?
Ans: Certificate of Authority
Q: Who does an agent represent?
Ans: Always deemed to represent an insurer (company)
Q: What is the authority that is written in a contract?
Ans: Express Authority
Q: What are the four elements of a contract?
Ans: 1. Offer and Acceptance
2. Consideration
3. Competent Parties
4. Legal Purpose
Q: Define a fiduciary.
Virginia Property and Casualty Insurance
Questions and Answers 100% Correct Answers
Already Graded A+
Q: What is based on the principle of Risk Transfer
Ans: Spreading the results of a financial loss among many persons, so the cost to
any one person is small
Q: What kind of risk has an outcome that is uncertain?
Ans: Speculative Risk
Exampromax - Stuvia US
Q: What is the reason for a claim?
Ans: A loss is the reason a claim against an insurance company.
Q: What is the measure of a loss?
Ans: Exposure Units
Q: Name three types of hazards.
Ans: 1. Physical Hazard
2. Moral Hazard
3. Morale Hazard
Q: What is a cause of a loss?
Ans: Perils are the causes of possible loss
Q: What is the common way to transfer risk?
Ans: The most common method of risk transfer is when a homeowner purchases
insurance on their home..
Q: Define adverse selection.
, 2 Exampromax - Stuvia US
Ans: Insuring risks more prone to losses than an average risk.
Q: What is the theory of probability that is the basis for insurance?
Ans: The Law of Large Numbers
Q: Who manages a Mutual Company
Ans: A Boar of Trustees
Q: What is high risk coverage purchased from an unauthorized company?
Ans: Surplus Lines Insurers
Q: How are insurance companies defined?
Exampromax - Stuvia US
Ans: Where they are located, chartered, or incorporated.
Q: What protects policy holders from an insurer's insolvency?
Ans: Property and Casualty Insurance Guaranty Association
Q: What must all insurers obtain to conduct insurance business?
Ans: Certificate of Authority
Q: Who does an agent represent?
Ans: Always deemed to represent an insurer (company)
Q: What is the authority that is written in a contract?
Ans: Express Authority
Q: What are the four elements of a contract?
Ans: 1. Offer and Acceptance
2. Consideration
3. Competent Parties
4. Legal Purpose
Q: Define a fiduciary.
