Concepts of insurnace

Question 1

Adhesion

Answer 1

describes a contract that has been prepared by one party with not a negotiation between the applicant and the insurer

Question 2

Agent

Answer 2

represents themeselves and the inurer at the time of application

Question 3

Aleatory

Answer 3

presents the potential for an unequal exchange of value or consideration between both parties. conditioned upon the occurrence of an event

Question 4

Apparent Authority

Answer 4

the appearance of the insurer providing the agent authority to perform unspecified tasks based on the agent insurer relationship

Question 5

Broker

Answer 5

represents themselves and the insured at the time of application

Question 6

competent party

Answer 6

is one who is capable of undstanding the contract being agreed to

Question 7

Concealment party

Answer 7

The failure of the applicant to disclose a known material fact when applying for insurance

Question 8

Conditional

Answer 8

describes the insurers’ promise to pay benefits depending on the occurrence of an event covered by the contract

Question 9

Consideration

Answer 9

the part of an insurance contract setting forth the amount of initial and renewal premiums and frequency of future payments

Question 10

Appliants

Answer 10

insurer with a completed application and intial premium as consideration for insurace

Question 11

Estoppel

Answer 11

legal impediment to one party denying the consequences of its own actions or deeds if such actions or deeds result in another party acting in a specific manner or if certain conclusions are drawn

Question 12

Express Authority

Answer 12

the explicit authority granted to the agent by the insurer, as written in the agency contract.

Question 13

Fiduciary

Answer 13

responsibility an insurance producer has to account for all premiums collected and provide sound financial advice to clients.

Question 14

Fraud

Answer 14

include deliberate knowledge of or intentional deceit to make false statements to be compensated by and insurance company

Question 15

impled Authority

Answer 15

authority not explicitly granted to the agent in the contract of agency, but which common sense dictates the agent has

Question 16

insurable interest

Answer 16

the financial, economic, and emoitional impact associated with a person experiencing a specified loss- a person has an insurable interest in a loss if they have more to gain by not suffering the loss

Question 17

insurance policy

Answer 17

a written contract in which one party promises to indemnify another againsgt loss that arises from an unknown event

Question 18

Legal Purpose

Answer 18

an insurance contract must be legal in nature and not in opposition to the public policy

Question 19

Material misrepresentation

Answer 19

false statement made by an applicant that would influence an insurer in determining whether or not to accept the risk

Question 20

Parol evidence rule

Answer 20

involves parties put their agreement in writing , all previous verbal statements come together in that writing.- written contract cannot be changed or modified by parol(oral) evidence

Question 21

Policy rider or endorsement

Answer 21

an amendment added to a policy that overrides terms in the original policy. endorsements may add or remove coverages, change deductibles or revise any other policy feature.

Question 22

Reasonable expectations

Answer 22

the insured is entitled to coverage under a policy that any sensible and prudent person would expect it to provide

Question 23

Representations

Answer 23

statements made by the applicant that they consider to be true and accurate to the best of the applicant’s belief

Question 24

Subrogation

Answer 24

the right for an insurer to pursue a third party that caused an insurance loss to the insured

Question 25

Unilateral

Answer 25

mean only one party, the insurer, makes any kind of enforceable promise

Question 26

utmost good faith

Answer 26

the belief that both the policy owner and the insurer must know all material facts and relevant information

Question 27

Valued Contract

Answer 27

pays the stated sum regardless of the actual loss incurred- life insurance contracts are valued contracts

Question 28

Voidable Contract

Answer 28

an agreement that, for a reason, satisfactory to the court, may be set aside by one of the parties in the contract.

Question 29

Waiver

Answer 29

voluntary giving up of a legal given right

Question 30

Warrenty

Answer 30

statement made by the applicant that is guaranteed to be true in every aspect.

Question 31

Aleatory Contract

Answer 31

one party recovers more in value than he or she has parted with based upon a possible future event

Question 32

Contract of Adhesion

Answer 32

the contract has been prepared by one party, the insurance company. The applicant and the insurer did not negotiate the terms of the contract. In effect, the applicant adheres to the terms of the contract on a “take it or leave it” basis when accepted

Question 33

doctrine of reasonable expectations.

Answer 33

an insurance contract may be interpreted by a “reasonable” consumer. The purpose is to correct any advantage gained by the party who prepared the contract.