Which best describes: An Insurance Binder

Documentation to evidence of insurance coverage for insured item

Poor Characteristics of the Insured

Which of the Following best defines a "Material Fact"?

Fact that would influence insurer's decision to accept or reject the risk

What best describes a deductible?

Amount of loss the insured must pay

Preferred Demographic to sell insurance to

Why do we Qualify Clients?

See if they're a good fit for brokerage/company

Broker of Record is..

Broker Receiving Commission for Handling Policy

Which of the Following best describes an All-Risk Policy

Coverage defined by exlusions, wording on broadform policy wording

Which of the following marketing activities would be an example of differentiation?

Chubb Insurance offers a discount to owners of 2019 or newer Maserati

Which of the Following best defines a Policy Condition?

Provides the rights and duties of both the insurer and the insured.

What can a Broker do if the Client/Risk is Declined by Insurer?

Call Insurer/Underwriter and advocate for client

Which one of the following is a valid reason for an underwriter to decline a risk?

The risk is more hazardous than average risk

Qualifying a client means?

Asking questions to determine if prospect can be helped with your services

Ricky the Broker would like to transfer the policy from incumbent insurer. What is the next step the prospect can take?

Sign a letter of authorization appointing Ricky as the broker.

Multiple Loss Payees on a Single Family Dwelling could be concerning to Underwriters because:

Abnormal for Single Family Dwelling to have multiple Mortgages

What is the best definition of Binding Authority?

Capacity to confirm coverage to applicants who submit insurance application

Which of the following is a true statement about Agent and Broker Authority

Agents and Brokers obtain authority from their agreement with the insurer

Which of the Following best defines a Policy Warranty?

Promise from the insured to maintain an extra condition of the policy

Which of the Following best describes a Named Peril Policy

Coverage for only listed perils on policy

Condition that may increase the chance a peril will occur

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Midterm Review

32 termsStudBud Administration160 plays

INS 202 & C130

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Questions 32

Answers

1
Which best describes: An Insurance Binder
Broker's Payment Plan
Binding Authority for Risk
Documentation to evidence of insurance coverage for insured item
Documentation claim will be paid
2
A Moral Hazard is
Upstanding Reputation in Community
Going for a 64 Yard Field Goal with Russ as your QB
Poor Characteristics of the Insured
Poor Attitude of Insured
3
Which of the Following best defines a "Material Fact"?
Fact that would influence an insurer to provide digital policy docs
Any fact that would affect the risk to be insured
Fact that would influence insurer's decision to accept or reject the risk
Fact that would influence insurer's decision to accept payment options
4
Example of Loss Prevention
Reactive to Insurance Loss
Burglar Alarm
Fire Extinguishers in Kitchen
Fire Sprinklers in Building
5
What best describes a deductible?
Coinsurance penalty
Amount of loss insurer must pay
Amount of loss the insured must pay
Coinsurance clause
6
A Target Market is
Accepting Every Risk/Policy
Preferred Demographic to sell insurance to
Refusing to Accept Risks
Only accepting first 100 Policies
7
Why do we Qualify Clients?
Ensure they have multiple mortgages
See if they're a good fit for brokerage/company
Client is a Cold Lead Kicking Tires
Client is a Moral Hazard
8
All Policies are 12 Months in Length
True
False
9
Broker of Record is..
Broker Receiving Commission for Handling Policy
Broker that had the policy
Broker who is Sub-Brokering Deal
Broker quoting policy
10
Morale Hazard is...
Characteristics of the Insured
Great Client who pays their bills ontime
Poor Attitude of the Insured
Poor Moral Character of the Broker
11
A Client failing to comply with the Duty of Disclosure can lead to which of the following
Misrepresentation
Higher Deductibles
Higher Premiums
Losing Discounts
12
All of the Following are Secondary Consequences of a Loss Except...
Premium Increase
Repair to Damage Asset
Insurer Not Renewing Terms
Loss of Income
13
Which of the Following best describes an All-Risk Policy
Coverage defined by policy wording, on ACV basis
Coverage defined by exlusions, wording on broadform policy wording
Coverage for only listed perils on policy
Covers Every peril
14
Which of the following marketing activities would be an example of differentiation?
Local brokerage placed flyers in newspaper promoting new office location
Chubb Insurance offers a discount to owners of 2019 or newer Maserati
A brokerage purchased a billboard on a major highway to promote their CEO
An insurer partnered with local NHL star Austin Mathews for commercials
15
Which of the Following best defines a Policy Condition?
Promise from the insured to maintain an extra condition of the policy
A condition is mandatory while a warranty is not.
Provides the rights and duties of both the insurer and the insured.
Assurance of the product for its fitness, quality, and performance.
16
What can a Broker do if the Client/Risk is Declined by Insurer?
Call them and demand to speak to their manager
Tell Client to take business elsewhere
Absolutely Nothing
Call Insurer/Underwriter and advocate for client
17
Which one of the following is a valid reason for an underwriter to decline a risk?
Risk is fits appetite of Insurer, However Commission is too Low
The risk is more hazardous than average risk
Underwriter does not like broker
Underwriter knows the applicant and does not like them
18
Who can be an Applicant on an Insurance Policy?
Mortgagee
Incorporated Business
Name of Business
Insurance Broker
19
Which may cause discrepancies between final Premium and Quoted Premium?
Change in Broker of Record on Policy
Underwriting Change on Policy
Wrong Interuptation of Quote information
Quote is only rough estimate of premium
20
Who ultimately makes the decision to bind a policy?
Agent
Underwriter
Client
Broker
21
Qualifying a client means?
Making sure that the client can pay in full for the policy
Obtaining information for the prospect's insurance application
Asking questions to determine if prospect can be helped with your services
Submitting a proposal to an insurer requesting terms and pricing
22
Ricky the Broker would like to transfer the policy from incumbent insurer. What is the next step the prospect can take?
Transfers between brokers are not permitted.
Call the insurance company and ask to transfer the policy.
Register a complaint against Ricky with the insurance council.
Sign a letter of authorization appointing Ricky as the broker.
23
Multiple Loss Payees on a Single Family Dwelling could be concerning to Underwriters because:
Indicates the Insured is in a poor financial position
Too many documents to process
Applicant has poor credit
Abnormal for Single Family Dwelling to have multiple Mortgages
24
What is the best definition of Binding Authority?
Brokers can bind to whatever limits they wish.
Broker Acts as insurer and allows coverage up to $50,000 in premium
Capacity to confirm coverage to applicants who submit insurance application
Insured confirms with carrier they are insured
25
Which of the following is a true statement about Agent and Broker Authority
Policy Premiums are established by the individual brokerage/agent
Binding Authority confirms to applicants that all losses are covered
In Implied agency agreement, all terms have been stated and agreed upon
Agents and Brokers obtain authority from their agreement with the insurer
26
Which of the Following best defines a Policy Warranty?
A condition is mandatory while a warranty is not.
Promise from the insured to maintain an extra condition of the policy
Assurance of the product for its fitness, quality, and performance.
Provides the rights and duties of both the insurer and the insured.
27
What is the Play when your client needs coverage beyond standard Policy Limits?
Purchase Additional Coverage
Tell Client to Suck it up, Buttercup
Call your Supervisor for assistance
Tell Client this is the best you can do
28
An Insurance Agent Will Typically have access to how many markets?
Two
More than 2
None
One
29
What is purpose of Broker/Agent Report?
Advocate for Client to Insurer
Ask Client for Referrals
Tell Insurer about commission potential
Upsell Client
30
Which of the Following best describes a Named Peril Policy
Coverage for only listed perils on policy
Covers Every peril
Coverage defined by policy wording, on ACV basis
Coverage defined by exlusions, wording on broadform policy wording
31
A Hazard is...
Proximate Cause of Loss
Direct Cause of Loss
Indirect Cause of Loss
Condition that may increase the chance a peril will occur
32
Nonstandard Risks are Best Handled by:
Direct Writers
Exclusive Agents
Independent Broker
Michael Scott

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