Module 1 - Auto Policy - Insurance Terms and Concepts

Question 1

Insurance is usually defined as a:

Answer 1

Legal Contract

Question 2

Insurance is designed to be made whole and that is called to:

Answer 2

Indemnify

Question 3

Insureds present a claim for _______________ .

Answer 3

Losses

Question 4

There are two types of risk or chance of loss:

Answer 4

Speculative risk and Pure risk

Question 5

An insurance policy only pays when a person has this:

Answer 5

Insurable Interest

Question 6

How do most people transfer risk to another party?

Answer 6

Insurance

Question 7

This document has coverages, conditions, exclusions and endorsements.

Answer 7

Policy

Question 8

Underwrites risks and pays claims:

Answer 8

Insurance Companies

Question 9

What are the parts of a valid contract?

Answer 9

Consent, Consideration, Legal Capacity, and Legal Nature

Question 10

All gray areas of an insurance contract are decided in favor of the insured because the policy is a contract of:

Answer 10

Adhesion

Question 11

Two characteristics of an insurance contract are:

Answer 11

Personal and Indemnification

Question 12

Splitting the blame in a multiparty claim is:

Answer 12

Comparative Negligence

Question 13

An event or circumstance that causes a loss is a:

Answer 13

Peril

Question 14

An event or circumstance that increases the likelihood or severity of a loss is a:

Answer 14

Hazard

Question 15

When two insurance policies apply to a loss the one that pays first is said to be the __________ policy:

Answer 15

Primary

Question 16

When two insurance policies apply to a loss the one that pays second is said to be the __________ policy:

Answer 16

Excess

Question 17

Liability coverages/policies pay claims to:

Answer 17

Third Parties

Question 18

A cause of loss that is related to an unbroken chain of events is said to be the __________________ cause.

Answer 18

Proximate

Question 19

An insurance company based in Florida that may write other states is said to be a ____________ company of Florida.

Answer 19

Domestic

Question 20

The insurance company stands in for insured to make a claim against the wrongdoer and recover their payment.

Answer 20

Subrogation