what does Absolute mean?

Automatically at fault for doing something dangerous

What does Liability mean?

Legal responsibility to pay for damages caused by your wrongful acts

What does Hazard Mean?

Increase the chance of risk occurring

Reduction or disappearance of value

What does Indemnity mean?

Restore the insured to their previous financial condition

What does Law of Agency mean?

repre the insure and the knowledge of the agent is the knowledge of insurer

What does Domestic Insurer mean?

Is a state they are incorporated in

What does Fraud mean?

Deceive or lying to cheat the insurance company

What is Loss by Fire?

Estimation of the total loss to the property and contents (fire dam, smoke)

What does Occurrence mean?

Covers claim made for injuries sustained during the lifeof insurance policy

What does Stock Companies mean?

Owned by Shareholders, issue non-participating policies dividends are taxed

What does Salvage Value mean?

Amount of money an insurance company can get by selling a damaged asset

Loss or nothing, No chance of gain

What does Mutual companies mean?

Owned by Policyholders issue participating policies dividends are not taxed

What is Property Inspection?

Evaluation of a home or property to assess the risk of insuring it

What does Fiduciary Responsibility mean?

Agents submits premium collected to the insurance company

What does Indirect mean?

Cover losses due to business interruptions

What does Aleatory Mean?

Unequal Exchange(customer pays small month premium insurer pay large claim)

What does Foreign Insurer mean?

is a state where they are not headquartered, but they are selling

What does Replacement Cost mean?

Covers the cost to replace damaged or stolen property with new items

What is Legal Purpose?

Cannot be against public policy/ break the law

What does Elements of a legal contract mean?

Elements include compotent parties, legal purpose, offer and acceptance

What does Reasonable Expectations mean?

A customer can expect the coverage if an agent implied it during sale

What does Personal Mean?

Between the customer and the insurer

What does Coinsurance mean?

Insured pays a share of the payment made against a claim

What is The Law of Large Numbers?

The more stats you look at, the more predictable losses will be

What is Fair Credit Reporting Act?

Federal law that protects the privacy and accuracy of consumer reports

What is Personal Risk Insurance?

Provide funds to replace the loss of someone's personal income

What does Cancellation mean?

When an insurance company ends an insurance policy before expiration date

What does Market Value mean?

Value of an insured property in open market at the time of covered loss

What does Conditional mean?

Both parties have rules/duties they must follow or do

Value of an object at a certain point in time after its purchase

What does Stated Value mean?

Holder states the value of their property to their insurer at the beginning

What does Certificates of Authority mean?

Allows insurer to sell in that state making them admitted and authorized

What is Financial Responsibility?

Legal requirements that drivers and owners have the ability to pay damages

Occurs at the end of the term when the policy is expiring

What are Endorsements?

Printed addendums to a contract

Failure to do what a reasonable person would have done in the same circum*

What does Adhesion mean?

Insurer write the policy, customer either takes it or leaves it

What does Physical Hazard mean?

Material and structure things you can see and touch

What does Competent Parties mean?

Not under the influence of drugs or alcohol, sound mind, legal age

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Personal Lines Insurance Terms

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Answers

1
what does Absolute mean?
Living within your means, regardless of the level of those means
An insurance policy that cannot be cancelled except for nonpayment or premi
When the company terminates your policy at the expire date
Automatically at fault for doing something dangerous
2
What does Liability mean?
Legal responsibility to pay for damages caused by your wrongful acts
Provides coverage for your home structure contents
A formal written notice that the claimant sends to an insurance company
Limit the application of an exclusion such that it does not apply to circum
3
What is Risk
Chance of loss occurring
Chance of loss Retention
Chance of loss Reduction
Chance of loss reoccuring
4
What does Hazard Mean?
Increase the chance of risk occurring
Increase the chance of a loss
Increase the chance of a gain
Increase the chance of risk loss
5
What is a loss?
Reduction of appearance of value
Reduction or disappearance of value
Retention or disappearance of value
Retention or appearance of value
6
What does Indemnity mean?
With holding or hiding on the application
absolutely true statements
Restore the insured to their previous financial condition
Deceive or lying
7
What does Law of Agency mean?
Represents the insurer is in state
Represents the insurer is out of state
repre the insure and the knowledge of the agent is the knowledge of insurer
Represents the insurer but doesn't acknowledge
8
What does Express mean?
Submits premium collected to the insurance company
Assumed by the insurer
is a Written/Contract
Assumed by the customer
9
What does Domestic Insurer mean?
Is another state they are incorporated in
Is a state they are incorporated in
is completely outside of united states
Is a state they are not incorporated in
10
What does Fraud mean?
Deceive or lying to cheat the insurance company
May not be issued for illegal or immoral purpose
Insurer authorized by the state
Elements include compotent parties
11
What is Loss by Fire?
legal requirements that drivers and vehicle owners have the ability to pay
The policy that responds first to an insured loss
Estimation of the total loss to the property and contents (fire dam, smoke)
a requirement that health plans cover various health services
12
What does Occurrence mean?
Covers claim made for injuries sustained during the lifeof insurance policy
Coverage that provides protection for an accident that results in injury
When something goes missing in a strange confusing way
Making misleading or untrue statements about an insurance policy
13
What is a Peril?
Lying on purpose
Uncertainty concerning a loss
Possibility of loss or no loss
The cause of a loss
14
What does Stock Companies mean?
Owned by Stockholders. Issue Non-participating dividends are taxed
Owned by Shareholders, issue non-participating policies dividends are taxed
Owned by stockholders, issue participating policies dividends are taxed
Owned by Shareholders, Issue participating policies dividends are taxed
15
What does Salvage Value mean?
Lying on purpose
In the event of a loss
Amount of money an insurance company can get by selling a damaged asset
Carelessness
16
What is Pure Risk?
Loss or nothing, Chance of gain
No chance of gain, No Loss
Loss or nothing, No chance of gain
Pure risks are not insurable
17
What does Mutual companies mean?
Owned by policyholders issue non-participating policies dividends are taxed
Owned by stockholders issue non-participating policies dividends are taxed
Owned by shareholders issue participating policies dividends are not taxed
Owned by Policyholders issue participating policies dividends are not taxed
18
What is Property Inspection?
event that causes a loss
Uncertainty concerning a loss
Evaluation of a home or property to assess the risk of insuring it
possibility of loss or no loss
19
What is a Warranty?
between the customer and insurer
Lying on purpose
An untrue statement
An absolutely true statement
20
What does Fiduciary Responsibility mean?
Cannot be against public policy
both parties bring something of value
Agents submits premium collected to the insurance company
Know as offer and acceptance
21
What does Indirect mean?
Contract where the insurer agrees to pay the insured for a designated loss
Insured pays a share of the payment made against a claim
Cover losses due to business interruptions
Maximum amount that an insurance company pays for a specified loss
22
What does Aleatory Mean?
Unequal Exchange(customer pays small month premium insurer pay large claim)
A requirement of health plans cover various health care services
A one sided contract where only one party is legally bound
Between the customer and insurer
23
What does Foreign Insurer mean?
Is completely outside of the united states
Is a state where they are headquartered, but they are not selling
Is a state where they are not headquartered but they are not selling
is a state where they are not headquartered, but they are selling
24
What does Replacement Cost mean?
Insurance that covers water damage
Evaluation of a home or property to assess the risk of insuring it
Covers the cost to replace damaged or stolen property with new items
Insurance that covers damage to a building or its contents due to fire
25
What is Legal Purpose?
Between the customer and the insurer
Not under the influence of drugs or alcohol
Cannot be against public policy/ break the law
Unequal exchange
26
What does Elements of a legal contract mean?
Exchange of value between the parties to the contract that make the binding
Duty to recommend purchase of only suitable policies
Insurer authorized by the state
Elements include compotent parties, legal purpose, offer and acceptance
27
What does Reasonable Expectations mean?
carelessness
lying on purpose
A customer can expect the coverage if an agent implied it during sale
untrue statement
28
What is a Morale Hazard?
Transfer risk of a loss
Lying on Purpose
Telling the truth
Sense of Carelessness
29
What does Implied mean?
Is a written/contract
Assumed by a customer
Assumed by the insurer
completely outside of the united states
30
What does Personal Mean?
Between the customer and the insurer
Customer submits and application
Unequal exchange
Known as offer and acceptance
31
What does Coinsurance mean?
Form or property insurance that covers damage and losses caused by fire
Certificate for some drivers by their state or court order
Insured pays a share of the payment made against a claim
Fraudulent business posing as a legitimate insurance company
32
What is The Law of Large Numbers?
Allows insurers to sell in this state
Cause of a loss
Lying on purpose
The more stats you look at, the more predictable losses will be
33
What is Fair Credit Reporting Act?
Federal law that protects the privacy and accuracy of consumer reports
Failure to take reasonable action to prevent damage or harm to person
Lying on purpose
Risk of a loss
34
What is Personal Risk Insurance?
Guarantees that the insurance company cannot cancel or modify the terms
When either the policyholder or the insurance company terminates a policy
Proof of future financial responsibility as required
Provide funds to replace the loss of someone's personal income
35
What does Cancellation mean?
When something goes missing in a strange or confusing way
When an insurance company ends an insurance policy before expiration date
Chance of occurrence of something harmful that might include loss or damage
Protection for claims from covered losses resulting from collision and fire
36
What does Market Value mean?
Ensures the policyholder can continue their coverage
When either the policyholder or the insurance company terminates a policy
Proof of future financial responsibility as required
Value of an insured property in open market at the time of covered loss
37
What does Conditional mean?
Statements that are believed to be true are not guaranteed to be true
Both parties have rules/duties they must follow or do
Restore the insured to their previous financial condition
An untrue statement
38
What does Agreement mean?
Cannot br against public policy/ break the law
Know as offer and acceptance
Insurer issues policy
Customer submits an application
39
What is Fair Value?
Estimation of the total loss to the property and contents
Value of an object at a certain point in time after its purchase
a requirement that health plans cover various health care
Occurs at the end of the term when the policy is expiring
40
What does Stated Value mean?
Occurs at the end of the term when the policy is expiring
Holder states the value of their property to their insurer at the beginning
Estimation of the total loss to the property and contents
Pays for damage and injuries to another person caused by an accident
41
What does Certificates of Authority mean?
Allows insurer to sell in that state making them admitted and authorized
Allows insurer to sell in the same state as the other
Allows insurer to sell in another state
Allows insurer to submit insurance in another state
42
What is Financial Responsibility?
Possibility of a loss no gain
Legal requirements that drivers and owners have the ability to pay damages
Possibility of a loss
Requirement that health plans cover various health services
43
What is Nonrenewal?
Occurs at the start of the term when the policy is expiring
Occurs at the end of the term when the policy is expiring
Occurs at the start of the term when the policy is starting
Occurs at the end of the term when the policy is beyond expiring
44
What are Endorsements?
Automatically at fault for doing something dangerous
Printed addendums to a contract
The injured party must be completely free of fault in order to collect
A parent is responsible for child
45
What does Apparent(perceived) mean?
Is assumed by the insurer
is Assumed by the company out of state
Is assumed by the insurance company in state
Is assumed by customer
46
What is a Moral Hazard?
Reduction or disappearance of value
Lying on Purpose
Carelessness
Telling the truth
47
What is Negligence?
A policy based on the max amount of money the insurer will pay
A policy based on a fair valuation for the property
Used when it is difficult to establish the amount of insured property
Failure to do what a reasonable person would have done in the same circum*
48
What does Adhesion mean?
Insurer write the policy, customer either takes it or leaves it
between the customer and insurer
Unequal exchange
One sided promise, only the insurer is legally bound to do anything
49
What does Physical Hazard mean?
Pays for damage and injuries to another person
Material and structure things you cannot see and touch
Estimation of total loss
Material and structure things you can see and touch
50
What is Handling Risk
STARRY
STARR
ATV
STARRS
51
What does Competent Parties mean?
Under the influence of drugs and alcohol
Not under the influence of drugs or alcohol, sound mind, legal age
unequal exchange
Cannot be against public policy/ break the law
52
Consideration on the side of the insured -
Application + Premium
Promise to pay a claim
Not under the influence of drugs or alcohol
both parties bring something of value
53
What is Consideration?
Cannot be against public policy/ break the law
Application + Premium
Both parties bring something of value
Evaluation of a home or property to assess the risk of insuring it
54
What is Concealment?
Absolutely true statements
With holding or hiding on the application
Risk chance of a loss
Untrue statements
55
What does Strict mean?
Liability for products
Action or agreement that could lead to an unreasonable restraint
A licenses professional who sells or negotiates insurance in the state
A program that teaches students to drive safe
56
What does STARR Mean?
Speculative, Transfer, Avoidance, Reduction, Retention
Sharing, Trust, Actual Value, Reduce, Recite
Sharing, Transfer, Avoidance, Reduction, Retention
Sharing, Trust, Actual Value, Retention, Reduction
57
What does Actual Cash Value mean?
Provide funds to replace the loss of someone's personal income and help pay
Legal requirements that drivers and vehicle owners have the ability to pay
The policy that responds first to an insured loss
Money an insurance company will pay to replace or fix damage or stolen prop
58
What are the two types of risks
Speculative and handling risk
Pure and speculative Risk
Pure and retention risk
Pure and Physical risk
59
What does Offer mean?
Both parties bring something of value
insurer write the policy customer either takes it or leaves it
Known as offer and acceptance
Customer submits an application
60
What does Representation mean?
Both parties have rules
Statements that are believed to be true but are not guaranteed to be true
Between the customer and the insurer
one sided promise only the insurer is legally bound to anything
61
What is Insurance?
Transfer risk of retention
Transfer risk of loss
transfer risk of gain
Transfer risk of reduction
62
What does Alien insurer mean?
Completely in the united states
Completely outside of the united states but not selling
Completely in the united states but not selling
Completely outside of the united states
63
Consideration on the side of the insurer -
Known as offer and acceptance
application + premium
Promise to pay a claim
Customer submits an application
64
What is Fire Insurance
insurance that covers damages from flood
insurance that covers damages from hail
insurance that covers damages from wind
Insurance that covers damage due to a fire
65
What does Acceptance mean?
Customer submits an application
Known as offer and acceptance
Statement that affects the acceptance of a risk
Insurer issues policy
66
What does Limit of Liability mean?
A type of property insurance that covers damage or destruction by fire
A temporary period when a person is not allowed to drive legally
Type of business liability coverage where in a employer is protected
Maximum amount that an insurance pays for a specific loss
67
What does Vicarious mean?
Protects policyholders from property damage caused by gusty winds
Legal responsibility for another persons mistakes
Medical bills for injuries sustained by a guest on your property
Accidental damage you cause to someone else's property
68
What are the agents of authority?
Exam, Implied, Appraisal
Express, Insured, Appraisal
Express, Implied, Apparent(perceived)
Exempt, Impatient, Apparent
69
What does Exposure Mean?
STARR
Unit of measurement to determine rates based on how risky they are
Increase the chance of loss occurring
No loss, No gain
70
What is Mandated Offer of Coverage?
A requirement that health plans do not cover various health services
A requirement that health plans cover various health services
A nonrequirement that health plans cover various services
Legal requirements that drivers and vehicle owners have the ability to pay
71
What is a Binder?
Legal duty, standard of care, unbroken chain of events and actual loss
The other party's negligence or fault will not necessarily defeat the claim
insurance contract delivers by the insurer to insured before policy issued
Unbroken chain of events beginning with negligence and leading to injury
72
What does Loss Valuation mean?
Using credit info, following state insurance laws, notifying consumers
Amount of money an insured person will receive from their insurance in loss
Financial interest of a mortgagee
Take possession of damaged property after paying for its loss
73
What does Deductible mean?
STARR
Amount of money that the insured person must pay before their policy pays
Reduction and retention
Lying on purpose
74
What does Misrepresentations mean?
An Absolutely true statement
Deceive or lying
with holding or hiding on the application
An untrue statement
75
What is Speculative Risk?
Loss or gain (Ex: Gambling)
Loss no gain
No loss But Gain
No loss No Gain
76
What does unilateral mean?
One sided promise, only the insurer is legally bound to do anything
Cannot be against public policy
insurer issues policy
Known as offer and acceptance
77
What does Direct Loss mean?
When the insured is a first party and the insurer is second
Contract where the insurer agrees to pay the insured for a designated loss
Cover losses due to business interruptions
Insured pays a share of the payment made against a claim
78
What is a Peril?
Cause of gain
Cause of loss or gain
Cause of a loss like a fire or hail
Cause of no loss no gain
79
What does Proximate Cause mean?
Both agents and brokers are responsible for placing coverage with insurers
Primary event or series of events that directly leads to an insured loss
Created when the producer exceeds authority expressed in agency contract
Licensed individual or firm who discusses contract with insurers
80
What is Reinsurance?
When a company Hurts another
When a company indemnifies another meaning to make whole again after a loss
When a company lies on another
When a company reductions another

Personal Lines Insurance Terms Flashcards | StudBud