WebCE Flash Questions and Correct Solutions 2024

WebCE Flash Questions and Correct Solutions 2024 Indirect Loss - Answer -A secondary loss that follows from a direct loss to insured property from a covered peril. Ex. Hotel expenses incurred by the insured while a fire-damaged home is repaired is an indirect loss that follows the direct loss of the home. Exclusive Agency System - Answer -An insurance distribution system in which producers (agents) represent a single company. Ex. In the exclusive agency system, insurers use independent contractors (exclusive agents) that represent only one insurance company or, in some cases, a group of insurance companies under similar management. Five basic elements of a valid contract - Answer -1. Offer 2. Acceptance 3. Consideration 4. Competent parties 5. Legal purpose Ex. An applicant makes an insurance offer that results in a contract (policy) only if the offeree (insurer) accepts the offer (application). The applicant's consideration is the signed application and payment of the first premium. Peril and Hazard - Answer -Two related general insurance terms, the first of which is the cause of a loss and the second being any condition that increases the risk or severity of a loss. - A peril is the event that is insured against and includes fire, explosion, windstorm, theft, death. - Hazards are classified into three categories: moral hazard (e.g. excessive drinking, bad credit) morale hazard (driving recklessly)physical hazard (slippery floors, unsanitary conditions, unguarded