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Florida P&C Personal Lines- Insurance Terms & Related Concepts
Questions with 100% Verified Answers 2025 | 2026
Depreciation - ANSWER Reduction in value, particularly due to
wear and tear.
Exposure - ANSWER Susceptibility to risk.
Implied Warranty - ANSWER A legal term meaning that a
product is suitable for its intended purpose and that it fits an
ordinary buyer's expectations.
Insurance Policy - ANSWER a contract between a policyowner
(and/or insured) and an insurance company which agrees to pay
the insured or the beneficiary for loss caused by specific events
Insurer (principal) - ANSWER The company who issues an
insurance policy
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Obsolescence - ANSWER Depreciation in the value of a property
due to becoming outdated
Premium - ANSWER The money paid to the insurance company
for the insurance policy
Insurance is - ANSWER The transfer of risk of loss. The cost of an
insured's loss is transferred over to the insurer and spread
among other insureds.
Insurance - ANSWER is a transfer of risk of loss from an
individual or a business entity to an insurance company, which,
in turn, spreads the costs of unexpected losses to many
individuals. If there were no insurance mechanism, the cost of a
loss would have to be borne soley by the individual who
suffered the loss.
The Law of Large Numbers states that - ANSWER the larger the
number of people with a similar exposure to loss, the more
predictable actual losses will be. This is the statistical prediction
of loss upon which insurance rates are calculated.
Florida P&C Personal Lines- Insurance Terms & Related Concepts
Questions with 100% Verified Answers 2025 | 2026
Depreciation - ANSWER Reduction in value, particularly due to
wear and tear.
Exposure - ANSWER Susceptibility to risk.
Implied Warranty - ANSWER A legal term meaning that a
product is suitable for its intended purpose and that it fits an
ordinary buyer's expectations.
Insurance Policy - ANSWER a contract between a policyowner
(and/or insured) and an insurance company which agrees to pay
the insured or the beneficiary for loss caused by specific events
Insurer (principal) - ANSWER The company who issues an
insurance policy
, 2|Page
Obsolescence - ANSWER Depreciation in the value of a property
due to becoming outdated
Premium - ANSWER The money paid to the insurance company
for the insurance policy
Insurance is - ANSWER The transfer of risk of loss. The cost of an
insured's loss is transferred over to the insurer and spread
among other insureds.
Insurance - ANSWER is a transfer of risk of loss from an
individual or a business entity to an insurance company, which,
in turn, spreads the costs of unexpected losses to many
individuals. If there were no insurance mechanism, the cost of a
loss would have to be borne soley by the individual who
suffered the loss.
The Law of Large Numbers states that - ANSWER the larger the
number of people with a similar exposure to loss, the more
predictable actual losses will be. This is the statistical prediction
of loss upon which insurance rates are calculated.
