Texas All-Lines Adjuster Pre-Licensing
Chapter 1 - ANS
insurance - ANSfinancial took that protects individual and organizations from unforeseen and
extraordinary financial losses by transferring risk to another party
insured - ANSindividual or organization that pays premiums in exchange for protection
insurer - ANScompany, group, or government agency offering financial protection
how does insurance work? - ANSinsured pays premium
insurer promises to pay for specific losses if they occur
insurer's promise gives peace of mind to insured
principle of indemnity - ANSwhen a loss occurs, an individual should be restored to the
approximate financial condition he was in before the loss, no more and no less
Q1: How can insurance companies afford to pay for an individual's catastrophic loss? - ANS
Q1: The purpose of the principle of indemnity: - ANSprevents an insured from profiting from a
loss
Q1: Which of the following best defines premium? - ANSthe fee paid by the insured in exchange
for the insurance policy
Q1: What best describes insurance? - ANSan economic device used to protect against the risk
of unforeseen and extraordinary financial loss
Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his
insurance company and $4000 from the other driver. By receiving profit from his loss, Mark
could be in violation of: - ANSthe principle of indemnity
he should be in the same financial condition. no better, no worse
indemnification may include payment for: - ANSrepairs to property
reimbursement for additional living expenses
rental cars, hotels
,costs directly associated with a loss, as allowed under the policy
legal contract/insurance policy is: - ANScontract to provide financial protection for a fee
legally binding because it meets the 4 requirements of a legal contract
What are the 4 requirements of a legal contract? - ANSagreement (offer and acceptance)
consideration
competent parties
legal purpose
agreement - ANSmutual consent between offeror and offeree
acceptance criteria - ANSofferee communicates to the offeror his intent to enter into contract
must be unconditional - the offeree accepts the terms proposed by the offeror
original offeree is the only person who can legally accept the offer
An offer may be terminated by: - ANSrevocation by offeror
rejection by offeree
time lapse
termination by operation of law
-either party dies or becomes disabled
-performance of contract becomes illegal after the offer
-subject matter is destroyed
offer rejection - ANSexplicit rejection
proposal of new offer
counteroffer
consideration - ANSall parties bring something of value
competent parties - ANS18 years old, sober, and sane
, legal purpose - ANSno contracts for money laundering
Q2: An offeree may legally reject a contract offer by any of the following means EXCEPT: -
ANSasking for clarification or additional information
Q2: If covered by an insurance policy, an insured may be indemnified for all of the following
except: - ANShome remodels
Q2: Which of the following is NOT a requirement for a legally binding contract? - ANSit must be
a notarized document
Q2: Which of the following refers to being restored to the financial condition you were in before
a loss? - ANSindemnification
Q2: A legally binding contract is where the risk of financial loss is transferred in exchange for
premiums is called: - ANSan insurance policy
1-A: The purpose of the principle of indemnity is: - ANSto prevent and insured from making a
profit on a loss
1-A: Which of the following best defines premium? - ANSthe fee paid by the insured in
exchange for an insurance policy
1-A: What is a reserve, in insurance terms? - ANSa pool of collected premiums that the insurer
sets aside to pay claims
1-A: Which of the following refers to being restored to the financial condition you were in before
a loss? - ANSindemnification
six special characteristics of insurance contracts - ANSpersonal
adhesion
utmost good faith
aleatory
unilateral
conditional
personal contract - ANSprotects policyholder from financial losses
does not protect property from becoming damaged
Chapter 1 - ANS
insurance - ANSfinancial took that protects individual and organizations from unforeseen and
extraordinary financial losses by transferring risk to another party
insured - ANSindividual or organization that pays premiums in exchange for protection
insurer - ANScompany, group, or government agency offering financial protection
how does insurance work? - ANSinsured pays premium
insurer promises to pay for specific losses if they occur
insurer's promise gives peace of mind to insured
principle of indemnity - ANSwhen a loss occurs, an individual should be restored to the
approximate financial condition he was in before the loss, no more and no less
Q1: How can insurance companies afford to pay for an individual's catastrophic loss? - ANS
Q1: The purpose of the principle of indemnity: - ANSprevents an insured from profiting from a
loss
Q1: Which of the following best defines premium? - ANSthe fee paid by the insured in exchange
for the insurance policy
Q1: What best describes insurance? - ANSan economic device used to protect against the risk
of unforeseen and extraordinary financial loss
Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his
insurance company and $4000 from the other driver. By receiving profit from his loss, Mark
could be in violation of: - ANSthe principle of indemnity
he should be in the same financial condition. no better, no worse
indemnification may include payment for: - ANSrepairs to property
reimbursement for additional living expenses
rental cars, hotels
,costs directly associated with a loss, as allowed under the policy
legal contract/insurance policy is: - ANScontract to provide financial protection for a fee
legally binding because it meets the 4 requirements of a legal contract
What are the 4 requirements of a legal contract? - ANSagreement (offer and acceptance)
consideration
competent parties
legal purpose
agreement - ANSmutual consent between offeror and offeree
acceptance criteria - ANSofferee communicates to the offeror his intent to enter into contract
must be unconditional - the offeree accepts the terms proposed by the offeror
original offeree is the only person who can legally accept the offer
An offer may be terminated by: - ANSrevocation by offeror
rejection by offeree
time lapse
termination by operation of law
-either party dies or becomes disabled
-performance of contract becomes illegal after the offer
-subject matter is destroyed
offer rejection - ANSexplicit rejection
proposal of new offer
counteroffer
consideration - ANSall parties bring something of value
competent parties - ANS18 years old, sober, and sane
, legal purpose - ANSno contracts for money laundering
Q2: An offeree may legally reject a contract offer by any of the following means EXCEPT: -
ANSasking for clarification or additional information
Q2: If covered by an insurance policy, an insured may be indemnified for all of the following
except: - ANShome remodels
Q2: Which of the following is NOT a requirement for a legally binding contract? - ANSit must be
a notarized document
Q2: Which of the following refers to being restored to the financial condition you were in before
a loss? - ANSindemnification
Q2: A legally binding contract is where the risk of financial loss is transferred in exchange for
premiums is called: - ANSan insurance policy
1-A: The purpose of the principle of indemnity is: - ANSto prevent and insured from making a
profit on a loss
1-A: Which of the following best defines premium? - ANSthe fee paid by the insured in
exchange for an insurance policy
1-A: What is a reserve, in insurance terms? - ANSa pool of collected premiums that the insurer
sets aside to pay claims
1-A: Which of the following refers to being restored to the financial condition you were in before
a loss? - ANSindemnification
six special characteristics of insurance contracts - ANSpersonal
adhesion
utmost good faith
aleatory
unilateral
conditional
personal contract - ANSprotects policyholder from financial losses
does not protect property from becoming damaged
