DEFINITIONS/terms/wrong q's

Question 1

Risk

Answer 1

Chance of loss

Question 2

Peril

Answer 2

An event that MAY cause a loss to occur

Question 3

Proximate cause

Answer 3

The immediate and effective cause the loss

Question 4

Indemnity

Answer 4

To put you back in the same financial position just prior to loss , no better, no worse , no profit

Question 5

Property and casualty (P&C)

Answer 5

AKA General insurance Everything other than life and health

Question 6

Negligence

Answer 6

What a reasonable + prudent person would/wouldn’t do in same situation

Question 7

1st party/ 2nd party to contract

Answer 7

• 1st party = insured
• 2nd party = insurer

Question 8

Lloyd’s of London

Answer 8

It’s a market!!

NOT insurance

Question 9

Estoppel

Answer 9

Cannot deny what you’ve already said

Question 10

Reinsurance

Answer 10

Insurance for insurance companies

Question 11

Frequency

Answer 11

• based on % of biz
• based on % of loss (?)

Question 12

Severity

Answer 12

Dollar amount of loss

Question 13

Legal entity

Answer 13

Someone who can sue or be sued

I.e a business w/ a trade name (not a legal entity, can’t be sued)

I.e : Mikes repair shop: trade name, can’t sue) Mike smith: legal entity, CAN sue Legal entities: - Ltd - limited - inc -incorporated

Question 14

Actual cash value (ACV)

Answer 14

Today’s price - depreciation

OR

Replacement cost - depreciation

Question 15

Replacement cost

Answer 15

Today’s price W/O deducting depreciation

Question 16

Tort

Answer 16

You have been legally wronged Right to sue them (negligence)

Question 17

Material fact (pertaining to underwriter)

Answer 17

• Anything about risk (chance of loss) underwriter needs to know to accept/reject risk + terms and conditions to be added to policy of accepted

Question 18

Misrepresentation

Answer 18

• Non disclosure /concealment
• Silence when obligation to speak

Question 19

Voidable (void)

Answer 19

• contract never existed
• any premium rec’d , must be returned

Question 20

Damages

Answer 20

Monetary compensation to plaintiff for bodily injury/ property damage )

Question 21

Waiver (of premium?)

Answer 21

Relinquishment of a known right

Question 22

Hazard

Answer 22

A condition that MAY cause a peril to occur OR may make loss more severe

Question 23

Common law contracts 5 elements

(A Cool Cat Gets Lucky)

Answer 23

1. Agreement
   
   • offer and acceptance
   • even if not signed
2. Consideration
   
   • price to be paid
   • Definition: Payment or promise to pay (monthly) OR An exchg of something of value (even if NOT cash)
3. Legality of object/Purpose: Can’t be against public policy
4. Legal capacity (+ legal entity):
   
   • Minors: can enter contract, but can walk away
5. Genuine Intention
   
   • both wanted to enter contract, not forced

Question 24

Insurane contract 3 additional elements

(In It’s Underwear)

Answer 24

• Insurable interest
• Indemnity (salvage, contribution, subrogation)- SCS
• Utmost Goodfaith

Question 25

Basic fire policy- 3 perils

Answer 25

1. Fire
2. Lightning
3. Explosion

Question 26

SALVAGE

Answer 26

• slavage is the leftover
• Disposition negotiated between insurer and insured

Question 27

CONTRIBUTION

Answer 27

• the sharing of loss/liability btwn 2 or more isurane co’s
• Insurance under more than 1 policyt
  *

Question 28

SUBROGATION

Answer 28

• insurer will bring action in YOUR Name to enforce your rights or assume liability
• putting yourself in someone else’s shoes

Question 29

Vandalism

Answer 29

damage to property without regard to ownership

Question 30

malicious acts

Answer 30

damage to property DUE TO ownership (don’t like the owner)

Question 31

Manuscript wording

Answer 31

one of a kind wording

desihgned for a particular risk (i.e CN Tower)

Question 32

Subscription policy

Answer 32

2 or more ins co’s subscribing to policy

more than 2 insurance co participates in the policy prepared by the lead company

other companies take piece of the action to make a full 100%

Question 33

PREMIUM

Answer 33

Money required to pay losses that occur

Question 34

Key page numbers

Answer 34

*