Adjuster Pro - Insurance Adjuster Test: insurance Adjuster Test Study Guide: Questions & Answers: Updated Solution

What is insurance? (Ans- protection against financial loss what is a premium (Ans- a scheduled amount to be paid for an insurance policy. What are premiums used for (Ans- premiums are collected into a "pool" or "reserve to pay out claimants when needed. how can insurance companies afford to pay for an individuals catastrophic loss? (Ans- the insurer collects premiums from all policy holders and uses them to pay out the claims of a few. what is Indemnity (Ans- payment for damages, that is not more or less than the amount caused by the damage. principle of indemnity (Ans- insurance will pay no more or less than the actual financial loss suffered indemnification may also include (Ans- repairs to property reimbursement for additional living expenses rental cars and hotels costs directly associated with a loss 4 Parts of Legal Contract (Ans- 1. Agreement 2. Consideration 3. Competent Parties 4. Legal Purpose legal contract – agreement (Ans- mutual intent by offeror and offeree six special characteristics of insurance contracts (Ans- 1. Personal 2. adhesion 3. utmost good faith 4. aleatory 5. unilateral 6. conditional what kind of contract is an insurance policy? (Ans- Personal contract what is a contract of adhesion (Ans- the insured must accept the entire contract with all of its terms and conditions Utmost Good Faith (Ans- An obligation to act in complete honesty and to disclose all relevant facts. Aleatory Contract (Ans- a contract where the values exchanged may not be equal but depend on an uncertain event Unilateral Contract (Ans- insurance agrees that they must pay in event of a claim. the insured can stop paying premiums at any point. only the insurer has promised to perform an action. Conditional Contract (Ans- A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable. Acronym for the four sections of an Insurance policy (Ans- DICE D - declarations page I - Insuring Agreement C- Conditions E - Exclusions Decelerations section (Ans- Always the first section - establishes the following Names of both parties Policy number Location and description of insured item Dates of the policy Amount and limit of coverage Deductible Premium Definitions section (Ans- Defines terms used to write policy including "collusion" "decay" "like kind and quality" Includes important language for adjusters to know