SC P&C INSURANCE EXAM STUDY GUIDE
Abandonment - Answers - the abdication of insured property into the hands of another,
or into the possession of no one in particular
Absolute Liability - Answers - Liability that arises from an extremely dangerous situation.
Often found in cases involving explosives. Also known as "strict" liability. For example,
you are absolutely liable if you keep a wild animal as a pet.
Accident - Answers - an unplanned, unforseen event which occurs suddenly and at a
specific place
Actual Cash Value - Answers - the required amount to pay damages for property loss,
which is calculated based on the property's current replacement value minus
depreciation
Additional Coverage - Answers - a provision in an insurance policy that allows for more
coverage for a specific loss expense without an increase in premium
Additional Insureds - Answers - individuals or business that are not named as insured
on the decleration page, butr are protected by the policy, usually in regard to a specific
interest
Adhesion - Answers - A contract offered on a "take-it-or-leave-it" basis by an insurer, in
which the insured's only option is to accept or reject the contract. Any ambiguities in the
contract will be settled in favor of the insured.
Admitted Insurer - Answers - An insurer to which a state insurance department has
granted a license to do business within that state.
Adverse Selection - Answers - In general, the tendency for people with the greatest
probability of loss to be the ones most likely to purchase insurance.
Agent - Answers - an individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of an insurer
Aggregate Limit - Answers - the maximum amount an insurer will pay for all covered
losses during the covered policy period
Agreed Value - Answers - A property policy with a provision agreed upon by the insurer
and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
,Aleatory - Answers - A contract in which participating parties exchange unequal
amounts. the amount the insured will pay in premiums is unequal to the amount the
insurer will pay in the event of a loss.
Alien Insurer - Answers - an insurance company that is incorporated outside the U.S.
Apparent Authority - Answers - The appearance or the assumption of authority based
on the actions, words, or deeds of the principal or because of circumstances the
principal created.
Appraisal - Answers - an assesment of property to determine either the correct amount
of insurance to be written or the amount of loss to be paid
Arbitration - Answers - A process, agreed to by parties to a dispute in lieu of going to
court, by which a neutral person or body makes a binding decision
Assignment - Answers - the transfer of legal right or interest in an insurance policy, in
P&C ususally only valid with prior written consent of the insurer
Authorized Insurer - Answers - An insurance company that has qualified and received a
Certificate of Authority from the Department of Insurance to transact insurance in the
state.
Auto - Answers - a land motor vehicle, trailer or semi-trailer designed for use on public
roads
Avoidance - Answers - A method of dealing with risk by deliberately keeping away from
it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she
might choose never to fly in a plane).
Bailee - Answers - One who holds the personal property of another for a specific
purpose.
Beneficiary - Answers - the one who recieves the proceeds from an insurance policy
Binder - Answers - A temporary insurance contract that forms an oral or wirtten
agreement between the insurance company and the customer.
Blanket Bond - Answers - a type of bond that covers losses caused by dishonest
employees
Blanket Insurance - Answers - A single property insurance policy that provides coverage
for multiple classes of property at one location, or provides coverage for one or more
classes of property at multiple locations.
, Bodily Injury Liability - Answers - Insurance that protects a driver from claims resulting
from injuries or deaths for which the insured is at fault
Boycott - Answers - An unfair trade practice in which one person refuses to do business
with another until he or she agrees to certain conditions.
Builder's Risk Coverage Form - Answers - This coverage form provides coverage for
buildings that are under construction. Can also be used to cover a building while
additions and alterations are being made to the structure.
Building and Personal Property Coverage Form - Answers - A commercial property form
that covers buildings, and/or their contents.
Burglary - Answers - entering a building unlawfully with intent to commit a felony or to
steal valuable property
Cancellation - Answers - the termination of an in-force insurance policy by either the
insurer or the insured prior to the expiration date shown on the policy
Casualty Insurance - Answers - A type of insurance that is primarily concerned with the
legal liability for losses caused by injury to persons or damage to the property of others.
Cease and Desist Order - Answers - A demand of a person to stop committing an action
that is in violation of a provision.
Certificate of Authority - Answers - A document that authorizes a company to start
conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
Certificate of Insurance - Answers - A legal document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Claim - Answers - a demand made by an insured to cover a loss protected by the
insurance policy
Class Rating - Answers - The practice of computing a price per unit of insurance that
applies to all applicants possessing a given set of characteristics.
Coercion - Answers - An unfair trade practice in which an insurer uses physical or
mental force to persuade an applicant to buy insurance.
Coinsurance - Answers - A cost-sharing provision requires the insured to assume a
portion of the cost of covered services.
Abandonment - Answers - the abdication of insured property into the hands of another,
or into the possession of no one in particular
Absolute Liability - Answers - Liability that arises from an extremely dangerous situation.
Often found in cases involving explosives. Also known as "strict" liability. For example,
you are absolutely liable if you keep a wild animal as a pet.
Accident - Answers - an unplanned, unforseen event which occurs suddenly and at a
specific place
Actual Cash Value - Answers - the required amount to pay damages for property loss,
which is calculated based on the property's current replacement value minus
depreciation
Additional Coverage - Answers - a provision in an insurance policy that allows for more
coverage for a specific loss expense without an increase in premium
Additional Insureds - Answers - individuals or business that are not named as insured
on the decleration page, butr are protected by the policy, usually in regard to a specific
interest
Adhesion - Answers - A contract offered on a "take-it-or-leave-it" basis by an insurer, in
which the insured's only option is to accept or reject the contract. Any ambiguities in the
contract will be settled in favor of the insured.
Admitted Insurer - Answers - An insurer to which a state insurance department has
granted a license to do business within that state.
Adverse Selection - Answers - In general, the tendency for people with the greatest
probability of loss to be the ones most likely to purchase insurance.
Agent - Answers - an individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of an insurer
Aggregate Limit - Answers - the maximum amount an insurer will pay for all covered
losses during the covered policy period
Agreed Value - Answers - A property policy with a provision agreed upon by the insurer
and insured as to the amount of insurance that represents a fair valuation for the
property at the time the insurance is written.
,Aleatory - Answers - A contract in which participating parties exchange unequal
amounts. the amount the insured will pay in premiums is unequal to the amount the
insurer will pay in the event of a loss.
Alien Insurer - Answers - an insurance company that is incorporated outside the U.S.
Apparent Authority - Answers - The appearance or the assumption of authority based
on the actions, words, or deeds of the principal or because of circumstances the
principal created.
Appraisal - Answers - an assesment of property to determine either the correct amount
of insurance to be written or the amount of loss to be paid
Arbitration - Answers - A process, agreed to by parties to a dispute in lieu of going to
court, by which a neutral person or body makes a binding decision
Assignment - Answers - the transfer of legal right or interest in an insurance policy, in
P&C ususally only valid with prior written consent of the insurer
Authorized Insurer - Answers - An insurance company that has qualified and received a
Certificate of Authority from the Department of Insurance to transact insurance in the
state.
Auto - Answers - a land motor vehicle, trailer or semi-trailer designed for use on public
roads
Avoidance - Answers - A method of dealing with risk by deliberately keeping away from
it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she
might choose never to fly in a plane).
Bailee - Answers - One who holds the personal property of another for a specific
purpose.
Beneficiary - Answers - the one who recieves the proceeds from an insurance policy
Binder - Answers - A temporary insurance contract that forms an oral or wirtten
agreement between the insurance company and the customer.
Blanket Bond - Answers - a type of bond that covers losses caused by dishonest
employees
Blanket Insurance - Answers - A single property insurance policy that provides coverage
for multiple classes of property at one location, or provides coverage for one or more
classes of property at multiple locations.
, Bodily Injury Liability - Answers - Insurance that protects a driver from claims resulting
from injuries or deaths for which the insured is at fault
Boycott - Answers - An unfair trade practice in which one person refuses to do business
with another until he or she agrees to certain conditions.
Builder's Risk Coverage Form - Answers - This coverage form provides coverage for
buildings that are under construction. Can also be used to cover a building while
additions and alterations are being made to the structure.
Building and Personal Property Coverage Form - Answers - A commercial property form
that covers buildings, and/or their contents.
Burglary - Answers - entering a building unlawfully with intent to commit a felony or to
steal valuable property
Cancellation - Answers - the termination of an in-force insurance policy by either the
insurer or the insured prior to the expiration date shown on the policy
Casualty Insurance - Answers - A type of insurance that is primarily concerned with the
legal liability for losses caused by injury to persons or damage to the property of others.
Cease and Desist Order - Answers - A demand of a person to stop committing an action
that is in violation of a provision.
Certificate of Authority - Answers - A document that authorizes a company to start
conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
Certificate of Insurance - Answers - A legal document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Claim - Answers - a demand made by an insured to cover a loss protected by the
insurance policy
Class Rating - Answers - The practice of computing a price per unit of insurance that
applies to all applicants possessing a given set of characteristics.
Coercion - Answers - An unfair trade practice in which an insurer uses physical or
mental force to persuade an applicant to buy insurance.
Coinsurance - Answers - A cost-sharing provision requires the insured to assume a
portion of the cost of covered services.
