Texas All Line Adjuster Exam Questions With Complete Solutions

Texas All Line Adjuster Exam Questions With Complete Solutions Law of Large numbers - ANSWER- The law of large numbers is a fundamental concept in statistics and probability that describes how the average of a randomly selected large sample from a population is likely to be close to the average of the whole population. The law of large numbers basically relies on the principle that the larger the pool, the more predictable the amount of losses will be in a given period. Underwriting - ANSWER- The process an insurance company uses to decide whether to accept or reject an application for a policy. They evaluate the risk and exposures of potential policyholders. They decide how much coverage the policyholder should receive, how much they should pay for it, or whether even to accept the risk and insure them. Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk. Peril - ANSWER- A cause of property losses. Under an insurance contract, used in the context of perild insurance against. Example- fire/lightning, explosion, windstorm, hurricane, collapse of building, vandalism, accidental discharge, and theft. Hazard - ANSWER- is a situation that poses a level of threat to life, health, property, or environment. Most hazards are dormant or potential, with only a theoretical risk of hard; however once a hazard becomes active, it can create an emergency situation. Direct loss - ANSWER- Direct physical loss to property. Indirect loss - ANSWER- Type of loss that does not result from a direct damage of a covered causer of loss or peril but is, instead, a consequence of the direct damage loss. For example, if a grocery store burns to the ground from a fire, that is the direct loss; however, the income lost because a store could not operate is the indirect loss. Principle of Indemnity - ANSWER- Is an insurance principle stating that an insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss. Property Insurance - ANSWER- Is insurance coverage for real and personal property against loss or damage from perils insured against. Insuring Agreement - ANSWER- This section of the insurance policy specifies what the insurance will provide coverage in exchange for premium payments by their customer. Deductible - ANSWER- The amount the insured must pay in a loss before any payment is due from the insurance company. The deductible is applied per occurrence. It is imperative that Adjuster's understand the meaning of deductible. Cancellation - ANSWER- Termination of an insurance policy by the insurance company or insured before the renewal date. Either side can cancel the policy. All notices of cancellation must be done in writing. Limit of Liability - ANSWER- The maximum amount that an insurance policy will pay. The limits of liability are specified on the policy declarations page.