Demetrius

Law of Large Numbers correct answer: The larger the number of people with a similar exposure to loss, the more predictable actual losses will be. Insurance correct answer: Transfers the risk of loss from an individual or business entity to an insurance company The three elements of insurable risk are correct answer: 1) Financial 2) Blood (relative) 3) Business Risk correct answer: The uncertainty or chance of a loss occurring Types of risks are correct answer: 1) Pure risk 2) Sp...

Agent/Producer correct answer: A legal representative of an insurance company Broker correct answer: An insurance producer not appointed by an insurer and whom represents the client Insured correct answer: A person covered by an insurance policy Insurance policy correct answer: A legal contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured/beneficiary for losses caused by specific events Principal correct answer: Insurer, company...

Which of the following policies does NOT contain an automatic reinstatement provision? a) Business automobile liability b) Personal automobile liability with split limits c) Homeowners d) General liability written with an aggregate limit correct answer: General Liability written with an aggregate limit The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coins...

____ is uncertainty of loss correct answer: risk ____ is a transfer of risk from the insured to the insurer correct answer: insurance ____ risk means there is no chance of gain. It is insurable. correct answer: pure ____ risk means there is a chance of a loss or a gain. It is not insurable. correct answer: speculative a ____ is something that increases the risk. correct answer: hazard the principle of _____ governs property and casualty policies. It states that the purpose of...

HO - 2 - Broad Form Named Peril HO - 3 - Special Form Open & Named Peril HO - 4 - Renters/Tenants Form Named Peril HO - 5 - Comprehensive Form Open Peril HO - 6 - Condo Form Named Peril HO - 8 - Modified Form Named Peril Homeowners Liability - Coverages E & F Homeowners Liability - Coverage E - Personal Liability $100K basic limit (per occurrence) Homeowners Liability - Coverage F - Medical Payments to Others (Goodwill Coverage) w/i 3 years of accident Legal liab...

Restoring an insured financially after a claim is known as correct answer: indemnity Prior to paying a claimant under a professional liability policy, the insurer must correct answer: Obtain the consent of the insured. The purpose of purchasing an umbrella liability policy is to provide correct answer: Excess insurance over the primary liability policy. Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation...

What phase begins after a new policy is delivered? correct answer: Free look period In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? correct answer: Unilateral What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? correct answe...

Perils correct answer: the cause of loss Policy Owner correct answer: the person who has the rights and privileges in the policy Risk correct answer: Uncertainty or chance of loss -Pure Risk(Insurable) -Speculative(Uninsurable) Insured correct answer: the person covered by the insurance policy insurer correct answer: a company that issues an insurance policy Law of large numbers correct answer: the larger the number of people with the same exposure to loss, the more predic...

The declarations section in a homeowners policy provides all of the following information EXCEPT correct answer: Policy exclusions An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? correct answer: 3 days Once a binder is issued, it can last no longer than correct answer: 90 days An insured has a maximum limit of coverage available under her liability policy during a policy year, regard...

Accelerated benefits correct answer: riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses accident correct answer: an unplanned, unforeseen event which occurs suddenly at an unspecified place Accidental Death and Dismemberment correct answer: an insurance policy which pays a specified amount or a specified multiple of the insured's benefits if the insured dies, loses sight, or loses two limbs accidental death...

what are the 3 separate coverage forms available under the dwelling program? correct answer: basic, broad, and special In practice, the dwelling property policy is commonly used to insure ______ _______ correct answer: rental dwellings what are the corresponding form numbers for dwelling property policies? correct answer: DP-1, DP-2, DP-3 Dwelling Property Policy can be purchased to insure properties solely used for residential purposes in what situations? correct answer: 1. Up to 5...

The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will correct answer: Apply to injuries of any guests or visitors. First aid costs for others injured on the insured's premises correct answer: Are paid in addition to the liability limit. All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT correct answer: Personal injury The in...

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? correct answer: $6,000 would be paid under other-than-collision coverage. Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim? correct answer: Professional liability Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how ...

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance ? correct answer: Only written statements can be considered fraud An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property ...

What law protects consumers from the circulation of inaccurate or obsolete information? correct answer: The Fair Credit Reporting Act What do individuals use to transfer their risk of loss to a larger group? correct answer: Insurance What is a deductible in an insurance policy? correct answer: A specified dollar amount that the insured must pay before the insurer will pay the policy benefits Wagering on a sporting event is known as what type of risk? correct answer: Speculative I...

A state-established program that requires insurers who write property insurance to accept risks in economically depressed areas in the same proportion as their other business bears to the total property insurance market is called the correct answer: Fair Trades Practice plan. A farmer is remodeling his 100-year-old farmhouse. He is in the process of painting the porch and hanging shutters. He keeps his ladder, paint, and other materials used to remodel his home under the porch. Which of the ...

Under absolute liability, does an injured party need to prove negligence? correct answer: No. Absolute liability exists when a condition or conduct is inherently dangerous, so proof of negligence is not required. What insurance principle does pro rata liability protect? correct answer: Indemnity What is the difference between vacancy and unoccupancy? correct answer: Vacancy - refers to an insured structure in which no people have been living or working and no property has been stored fo...

Insurance Terms To make whole again correct answer: Purpose of insurance Basic principle of insurance which the financial loss is assigned to another party. correct answer: Transfer A principle stating that the larger number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss. correct answer: Law of large numbers What you pay a month. correct answer: Premium The chance of a loss occurring that involves the op...

A policy that covers all causes of loss except for those specifically excluded is known as what type of policy? correct answer: Open Peril (or special) form What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident? correct answer: Per Occurence An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this? correct...

The causes of loss insured against in an insurance policy are known as correct answer: Perils Before an insurer will pay any loss under a policy, what is usually required from the insured? correct answer: Proof of loss An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has t...