Exam Fx PROPERTY & CASUALTY Exam Questions and Answers 2023 Rated!!

Exam Fx PROPERTY & CASUALTY Exam Questions and Answers 2023 Rated!! Law of Large Numbers - Correct answer-The larger the number of people with a similar exposure to loss, the more predictable actual losses will be. Insurance - Correct answer-Transfers the risk of loss from an individual or business entity to an insurance company The three elements of insurable risk are - Correct answer-1) Financial 2) Blood (relative) 3) Business Risk - Correct answer-The uncertainty or chance of a loss occurring Types of risks are - Correct answer-1) Pure risk 2) Speculative risk What type of risk does insurance cover? - Correct answer-Pure risk What is pure risk? - Correct answer-It can only result in a loss or no change What type of risk is not insurable? - Correct answer-speculative risk What is speculative risk? - Correct answer-Opportunity for loss or gain. For example, gambling. What is a peril? - Correct answer-a specific cause of loss What is a hazard? - Correct answer-conditions or situations that increase the probability of a loss occurring What is a loss? - Correct answer-reduction, decrease or disappearance of value of the person or property insured. What is indemnity? - Correct answer-provision in an insurance policy that states that in the event of loss, an insured can only collect to the extent of the financial loss. The insured is not allowed to gain financially. Subrogation - Correct answer-insurer's legal right to seek damages from third parties after it has reimbursed the insured. Accident - Correct answer-The sudden, unplanned and unexpected event not under the control of the insured. Neither expected or intended. Occurrence - Correct answer-losses caused by continuous or repeated exposure to conditions neither intended or expected. Direct loss - Correct answer-direct, physical damage to buildings and/or personal property Indirect Loss (consequential) - Correct answer-results of a direct loss What is the most prevalent indirect loss for homeowners? - Correct answer-Extra living expense that may be incurred by the insured while the home is being repaired. What is the primary type of indirect loss for commercial property? - Correct answer-The loss of profits a business may suffer from closing business while repaired. General damages - Correct answer-compensates an injured person for pain & suffering, mental anguish and disfigurement Open Peril - Correct answer-ANY risk of loss not specifically excluded Named Peril - Correct answer-Specific covered perils. There is no coverage for unlisted perils Special damages - Correct answer-specific out-of-pocket expenses for medical, miscellaneous and loss of wages Property damage loss - Correct answer-value of property and loss of use Punitive damages - Correct answer-form of punishment for extreme, outrageous behavior, gross negligence or willful intent Negligence - Correct answer-failure to use the care that a reasonable, prudent person would have taken under similar circumstances Burglary - Correct answer-forced entry into or out of the premises of another with felonious intent. *Must have visible signs of forced entry or exit* Robbery - Correct answer-taking of property from care or custody of a person through threatening or causing bodily harm. Mysterious disappearance - Correct answer-disappearance of property without knowledge of how it disappeared. *Excluded from most policies* Theft - Correct answer-any act of stealing that encompasses both burglary and robbery Vacancy - Correct answer-No people and no property stored for a period of time (usually 60 days) Unoccupancy - Correct answer-nobody living or working in structure for a period of time, but some property is stored.