Alabama Property and Casualty | 131 Questions with 100 % correct answers | Verified

Insurance - The transfer of risk through a legal contract Property - Covers real property and personal property against damage or loss resulting from covered causes of loss called perils. Casualty - Covers non-property loss (by a 3rd party) Personal Lines - Insurance coverages intended to protect individuals and their families. Commercial Lines - Property and casualty coverages for business firms, nonprofit organizations, and government agencies Risk - Uncertainty of financial loss Pure Risk - A risk that presents the chance of loss but no opportunity for gain Speculative Risk - Chance of loss or gain Law of Large Numbers - A principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss. Perils - Causes of loss insured against in an insurance policy Named Peril - A specific cause of loss listed and described in an insurance policy. Also used to describe policies containing named perils.Open Perils - Insurance that covers all perils except those specifically noted as excluded