Insurance Level 1 test Alberta Questions and Answers Already Passed

Insurance Level 1 test Alberta Questions and Answers Already Passed Insurance A contract in which one party, the insurer, for monetary consideration agrees to reimburse another, the insured for loss or liability for a loss on a defined subject caused by specific hazards or perils Indemnify To provide compensation for loss or expenses incurred Insurance Model Fund Income (Premiums)-Insurance Fund (Insurance)-Fund Outgo (claim payments) Premium The price of insurance protection for a specified risk for a specified period of time risk The chance of loss. Specifically, the possible loss or destruction of a property or the possible incurring of a liability. Sometimes referred to as the subject of an insurance contract. contract An agreement or promise between two or more persons that is intended to be legally enforceable and is constituted by the acceptance by one party of the offer made to him by another party, to do or abstain from doing a specific act. The offer and acceptance may be either expressed or be inferred through the conduct of both parties. Agent A person who is employed or authorized to act on behalf of another. Agents can be independent or direct writers. Independent Agent is one who contracts with at least two or more insurance companies to sell their insurance policies to the public and is paid a commission based on the percentage of each premium paid. This includes a fee for each policy serviced. Direct agent Represents only one company and sells for only one company. broker A licensed independent person or firm who acts on behalf of the insured in placing business with insurance companies. adjuster One who investigates insurance claims, makes recommendations regarding payment of benefits from insurance policies, and negotiates payments and settlements. staff adjuster Works for the insurance company and works directly with the insured to settle the claim independent adjuster qualified independent businessperson is appointed by the insurer to settle a claim public adjuster independent businessperson who may be engaged by the insured to help in the settlement of a claim. Infrequently used they are typically hired in cases where the claim is large and the amount is in dispute. Primary function of insurance To spread risk-losses of few are shared by many How insurers spread risk? 1) Volume-insuring large numbers of risks 2) Diversity of types of risks insured 3) diversity of location-Avoid too many risks in one location. Secondary functions of Insurance 1) Aid to Security- Insurance gives people peace of mind and allows for some degree of certainty in the future. 2) Aid to Credit- Cannot take out a house or car loan without insurance 3) Loss-Prevention Activities- Fire Prevention,