LOUISIANA P&C ADJUSTER EXAM
Insurance43-43answer--
Transfers43risk43of43financial43losses43from43one43party43to43another
Insured43-43answer--
Individual43or43organization43that43pays43premiums43in43exchange43for43protection
Insurer43-43answer--
Company,43group,43or43government43agency43offering43financial43protection
Premium43-43answer--Scheduled43monetary43fee43paid43by43insured43to43insurer
Insurance43Policy43-43answer--
A43legally43binding43contract43in43which43the43insurer43agrees43to43take43on43specified43r
isks43in43exchange43for43the43insured's43premiums
Principle43of43Indemnity43-43answer--
Restoration43to43previous43financial43condition;43no43more,43no43less
Four43Requirements43of43a43Legal43Contract43-43answer--
Agreement,43Consideration,43Competent43Parties,43Legal43Purpose
Six43Characteristics43of43an43Insurance43Contract43-43answer--1.43Personal43Contract
2.43Contract43of43Adhesion
3.43Utmost43Good43Faith43Contract
4.43Aleatory43Contract
5.43Unilateral43Contract
6.43Conditional43Contract
Most43insurance43contracts43are43also43contracts43of43indemnity
Sections43of43an43Insurance43Contract43-43answer--1.43Declarations43Page
2.43Definitions
3.43Insuring43Agreement
4.43Conditions
5.43Exclusions
,6.43Endorsements
Four43are43essential43(43and43two43very43common)43sections43of43an43Insurance43Contra
ct
D.I.C.E
Type43of43Insurers:43Government43-43answer--
mandatory,43run43by43government,43suited43to43needs43of43general43public
Type43of43Insurers:43Private43-43answer--
offer43insurance43products43based43on43customer43preferences
Type43of43Insurers:43Stock43-43answer--
publicly43traded;43stockholders43participate43in43dividends43(non-participating)
Type43of43Insurers:43Mutual43-43answer--
no43stockholders,43policyholders43participate43in43dividends43(participating)
Other43Private43Insurers:43Reciprocal43Insurer43-43answer--
Group43of43people43or43organizations43that43insure43each43other
Other43Private43Insurers:43Re-insurer:43-43answer--insurance43for43insurers
Other43Private43Insurers:43Fraternal43Benefit43Society43-43answer--non-
profit,43mutual43aid43organization43that43will43usually43offer43insurance43benefits43to43me
mbers43and43their43families
Other43Private43Insurers:43Risk43Retention43Group43-43answer--
an43alternative43to43traditional43insurance,43owned43by43its43members;43provides43liabilit
y43coverage43for43multiple43companies43in43the43same43business
Two43meanings43of43"Risk"43-43answer--*43Potential43of43loss
*43The43insured43item,43person,43or43organization
Speculative43Risk43-43answer--any43risk43in43which43gain43is43possible43(not43insurable)
Pure43Risk43-43answer--any43risk43in43which43no43gain43is43possible43(insurable)
Exposure43-43answer--possibility43or43likelihood43of43damage43or43loss
Hazard43-43answer--Anything43that43increases43exposure
Peril43-43answer--The43cause43of43damage43or43loss
Loss43-43answer--
Reduction43in43value;43expense43caused43by43a43covered43peril;43amount43an43insurer43
pays43to43settle43a43claim
,Qualifications43for43insurable43risk43-43answer--
1.43Policy43premiums43can43cover43both43claims43and43expenses.
2.43The43insurer43can43define43the43exact43conditions43under43which43the43item43is43cov
ered43by
the43policy;43if43the43item43itself43is43definable;43and43if43the43item,43person,43or43organiz
ation
has43clearly43defined43value.
3.43The43loss43is43unforeseeable,43unexpected,43and43reasonably43unpreventable.
4.43The43loss43causes43substantial43economic43hardship.
5.43The43insurer43can43exclude43coverage43for43significant43disasters43and43catastrophic
events.
6.43A43large43number43of43similar43types43of43risk43are43insured.
Four43Risk43Management43Techniques43-43answer--
1.43Risk43Avoidance43eliminates43risk
2.43Risk43Reduction43reduces43or43mitigates43risk
3.43Risk43Transference43means43paying43someone43else43to43take43on43risk
4.43Risk43Retention43assumes43or43accepts43risk
First43Named43Insured43-43answer--First43person43or43entity43listed43on43dec43page
Policy43Period43-43answer--
Inclusive43period43between43inception43and43termination43dates
Binder43-43answer--Temporary43Coverage43until43policy43is43issued
Representation43-43answer--a43statement43assumed43to43be43true
Misrepresentation43-43answer--a43false43or43misleading43statement
Warranty43-43answer--Guarantee43of43action43or43condition
Concealment43-43answer--Deliberately43withholding43pertinent43information
Express43Waiver43-43answer--
Written43notice43relinquishing43a43right,43claim,43or43privilege
Implied43Waiver43-43answer--
An43assumed43relinquishing43of43a43right,43claim,43or43privilege43based43on43practice
Estoppel43-43answer--
This43principle43holds43that43if43an43insurer43accepts43a43practice43for43a43time,43it43cann
ot43later43refuse43coverage43because43of43that43practice
, Moral43Hazard43-43answer--
Deliberate,43reckless43behavior43because43of43insurance43coverage
Morale43Hazard43-43answer--
Unpremeditated43risky43behavior43because43of43the43comfort43of43insurance43protection
Legal43Hazard43-43answer--Increased43chance43of43loss43due43to43legal43action
Physical43Hazard43-43answer--a43physical43condition43that43makes43a43loss43more43likely
Fraud43-43answer--using43dishonesty43to43profit43from43an43insurance43policy
Soft43fraud43-43answer--exaggerating43a43claim
Hard43fraud43-43answer--deliberately43causing43or43faking43losses
Occurence43-43answer--an43event43or43circumstance43that43cuases43a43loss
Proximate43Cause43-43answer--
The43original43occurrence43in43an43unbroken43chain43of43events43that43results43in43a43lo
ss
Direct43loss43-43answer--Physical43harm43to43tangible43property
Indirect43Loss43-43answer--Economic43loss43resulting43from43a43direct43loss
First43Party43Claim43-43answer--made43by43the43policyholder43against43his/
her43own43policy
Third43Party43Claim43-43answer--made43by43anyone43other43than43the43policyholder
The43Claim43Process43-43answer--
*43The43claimant43contacts43the43insurer43and43files43a43claim
*43The43insurer43acknowledges43the43claim43and43requests43all43items43necessary43to43p
rove43the43loss
*43The43adjuster43investigates43the43claim43and43determines43whether43it43is43valid
*43If43valid,43the43adjuster43evaluates43the43claim
*43The43insurer43accepts43or43rejects43the43claim
Insurable43interest43-43answer--
Direct43financial43interest43in43protecting43something43or43someone
Lender43interest43-43answer--The43lender's43financial43stake43in43an43insured43item
Lender43Interest43Provisions43-43answer--
Protect43lender43interest43by43allowing43the43lender43certain43rights43in43the43policy
Insurance43-43answer--
Transfers43risk43of43financial43losses43from43one43party43to43another
Insured43-43answer--
Individual43or43organization43that43pays43premiums43in43exchange43for43protection
Insurer43-43answer--
Company,43group,43or43government43agency43offering43financial43protection
Premium43-43answer--Scheduled43monetary43fee43paid43by43insured43to43insurer
Insurance43Policy43-43answer--
A43legally43binding43contract43in43which43the43insurer43agrees43to43take43on43specified43r
isks43in43exchange43for43the43insured's43premiums
Principle43of43Indemnity43-43answer--
Restoration43to43previous43financial43condition;43no43more,43no43less
Four43Requirements43of43a43Legal43Contract43-43answer--
Agreement,43Consideration,43Competent43Parties,43Legal43Purpose
Six43Characteristics43of43an43Insurance43Contract43-43answer--1.43Personal43Contract
2.43Contract43of43Adhesion
3.43Utmost43Good43Faith43Contract
4.43Aleatory43Contract
5.43Unilateral43Contract
6.43Conditional43Contract
Most43insurance43contracts43are43also43contracts43of43indemnity
Sections43of43an43Insurance43Contract43-43answer--1.43Declarations43Page
2.43Definitions
3.43Insuring43Agreement
4.43Conditions
5.43Exclusions
,6.43Endorsements
Four43are43essential43(43and43two43very43common)43sections43of43an43Insurance43Contra
ct
D.I.C.E
Type43of43Insurers:43Government43-43answer--
mandatory,43run43by43government,43suited43to43needs43of43general43public
Type43of43Insurers:43Private43-43answer--
offer43insurance43products43based43on43customer43preferences
Type43of43Insurers:43Stock43-43answer--
publicly43traded;43stockholders43participate43in43dividends43(non-participating)
Type43of43Insurers:43Mutual43-43answer--
no43stockholders,43policyholders43participate43in43dividends43(participating)
Other43Private43Insurers:43Reciprocal43Insurer43-43answer--
Group43of43people43or43organizations43that43insure43each43other
Other43Private43Insurers:43Re-insurer:43-43answer--insurance43for43insurers
Other43Private43Insurers:43Fraternal43Benefit43Society43-43answer--non-
profit,43mutual43aid43organization43that43will43usually43offer43insurance43benefits43to43me
mbers43and43their43families
Other43Private43Insurers:43Risk43Retention43Group43-43answer--
an43alternative43to43traditional43insurance,43owned43by43its43members;43provides43liabilit
y43coverage43for43multiple43companies43in43the43same43business
Two43meanings43of43"Risk"43-43answer--*43Potential43of43loss
*43The43insured43item,43person,43or43organization
Speculative43Risk43-43answer--any43risk43in43which43gain43is43possible43(not43insurable)
Pure43Risk43-43answer--any43risk43in43which43no43gain43is43possible43(insurable)
Exposure43-43answer--possibility43or43likelihood43of43damage43or43loss
Hazard43-43answer--Anything43that43increases43exposure
Peril43-43answer--The43cause43of43damage43or43loss
Loss43-43answer--
Reduction43in43value;43expense43caused43by43a43covered43peril;43amount43an43insurer43
pays43to43settle43a43claim
,Qualifications43for43insurable43risk43-43answer--
1.43Policy43premiums43can43cover43both43claims43and43expenses.
2.43The43insurer43can43define43the43exact43conditions43under43which43the43item43is43cov
ered43by
the43policy;43if43the43item43itself43is43definable;43and43if43the43item,43person,43or43organiz
ation
has43clearly43defined43value.
3.43The43loss43is43unforeseeable,43unexpected,43and43reasonably43unpreventable.
4.43The43loss43causes43substantial43economic43hardship.
5.43The43insurer43can43exclude43coverage43for43significant43disasters43and43catastrophic
events.
6.43A43large43number43of43similar43types43of43risk43are43insured.
Four43Risk43Management43Techniques43-43answer--
1.43Risk43Avoidance43eliminates43risk
2.43Risk43Reduction43reduces43or43mitigates43risk
3.43Risk43Transference43means43paying43someone43else43to43take43on43risk
4.43Risk43Retention43assumes43or43accepts43risk
First43Named43Insured43-43answer--First43person43or43entity43listed43on43dec43page
Policy43Period43-43answer--
Inclusive43period43between43inception43and43termination43dates
Binder43-43answer--Temporary43Coverage43until43policy43is43issued
Representation43-43answer--a43statement43assumed43to43be43true
Misrepresentation43-43answer--a43false43or43misleading43statement
Warranty43-43answer--Guarantee43of43action43or43condition
Concealment43-43answer--Deliberately43withholding43pertinent43information
Express43Waiver43-43answer--
Written43notice43relinquishing43a43right,43claim,43or43privilege
Implied43Waiver43-43answer--
An43assumed43relinquishing43of43a43right,43claim,43or43privilege43based43on43practice
Estoppel43-43answer--
This43principle43holds43that43if43an43insurer43accepts43a43practice43for43a43time,43it43cann
ot43later43refuse43coverage43because43of43that43practice
, Moral43Hazard43-43answer--
Deliberate,43reckless43behavior43because43of43insurance43coverage
Morale43Hazard43-43answer--
Unpremeditated43risky43behavior43because43of43the43comfort43of43insurance43protection
Legal43Hazard43-43answer--Increased43chance43of43loss43due43to43legal43action
Physical43Hazard43-43answer--a43physical43condition43that43makes43a43loss43more43likely
Fraud43-43answer--using43dishonesty43to43profit43from43an43insurance43policy
Soft43fraud43-43answer--exaggerating43a43claim
Hard43fraud43-43answer--deliberately43causing43or43faking43losses
Occurence43-43answer--an43event43or43circumstance43that43cuases43a43loss
Proximate43Cause43-43answer--
The43original43occurrence43in43an43unbroken43chain43of43events43that43results43in43a43lo
ss
Direct43loss43-43answer--Physical43harm43to43tangible43property
Indirect43Loss43-43answer--Economic43loss43resulting43from43a43direct43loss
First43Party43Claim43-43answer--made43by43the43policyholder43against43his/
her43own43policy
Third43Party43Claim43-43answer--made43by43anyone43other43than43the43policyholder
The43Claim43Process43-43answer--
*43The43claimant43contacts43the43insurer43and43files43a43claim
*43The43insurer43acknowledges43the43claim43and43requests43all43items43necessary43to43p
rove43the43loss
*43The43adjuster43investigates43the43claim43and43determines43whether43it43is43valid
*43If43valid,43the43adjuster43evaluates43the43claim
*43The43insurer43accepts43or43rejects43the43claim
Insurable43interest43-43answer--
Direct43financial43interest43in43protecting43something43or43someone
Lender43interest43-43answer--The43lender's43financial43stake43in43an43insured43item
Lender43Interest43Provisions43-43answer--
Protect43lender43interest43by43allowing43the43lender43certain43rights43in43the43policy
