General Definitions

Question 1

Insurer

Answer 1

the insurance company or carrier

Question 2

Insured

Answer 2

the person who bought insurance or client

Question 3

Named Insured

Answer 3

1. The person or business indicated on the policy. 2. In property insurance, this should be the owner of the property. 3. The named insured receives the broadest coverage of all persons listed in the policy.

Question 4

First Named Insured

Answer 4

1. The person or business whose name appears first in the policy. 2. In Commercial Lines, this entity has all the rights and certain responsibilities.

Question 5

Additional Insured

Answer 5

1. A person or business added by endorsement for their interest in the policy. 2. In property insurance, this could be a mortgagee or lienholder. 3. In liability insurance, this could be a party to a hold harmless agreement.

Question 6

Principle of Indemnity

Answer 6

1. This principle states that the insured will be restored to the same financial condition as before the loss. 2. The insured cannot profit from an insurance payout. 3. Indemnity considers depreciation

Question 7

Underwriting

Answer 7

1. Underwriting is the process of determining if a risk is acceptable to the insurer or not, what limits will be issued and at what premium rate. 2. This process classifies a risk for the insurer.

Question 8

Insurable Interest

Answer 8

1. Insurable interest is a principle that requires the insured to suffer
   financially in the event of a loss to obtain insurance and collect
   claim payment.
2. In property & casualty insurance, insurable interest must exist at
   the time of loss.

Question 9

Accident

Answer 9

is an unplanned and unforeseen event that occurs
suddenly and from which damage results

Question 10

Occurrence

Answer 10

is exposure to the same harmful conditions over a
period of time leading to a loss

Question 11

Cancellation

Answer 11

is the discontinuation of a policy prior to the
expiration date of the policy.

Question 12

Non-Renewal

Answer 12

1. Non-Renewal is the discontinuation of a policy at the expiration
   date of the existing policy.
2. A renewed policy for another period is not sent to the insured.

Question 13

Binder

Answer 13

A binder is a temporary legal agreement showing that certain
amounts of coverage are in force at certain limits.
a) Binders can be written or verbal.

Question 14

Certificate of Insurance

Answer 14

A certificate of insurance is a document issued by an insurance
company/broker that is used to verify the existence of insurance
coverage under specific conditions granted to listed individuals.

Question 15

Endorsement

Answer 15

is a policy form used to revise coverage in an enforce
property or casualty policy.

Question 16

Arbitration

Answer 16

1. Arbitration is a claims dispute resolution method designed to
   settle a question of coverage provided for a loss.
   a) For example, an insurer and insured cannot agree on the
   definition of a coverage or peril.

Question 17

Appraisal

Question 18

The Commissioner of Insurance

Answer 18

Enforce insurance rules and law
Make insurance law or any law
Issue Subpoenas, hold hearings,
administer oaths, take testimony,
assess and enforce penalties
Prosecute non-insurance related
crimes. Not a public prosecutor.
Sets Continuing Education
requirements
Sentence you to jail or prison
Ensure the fair treatment of
consumers
Administer the Workers’
Compensation system
Approve producer licenses and
insurer Certificates of Authority
Approve insurance policy and
endorsement forms