Module 4 Flashcards
The process of deciding how much and what kind of insurance to buy is called.
Insurance management
All of the following statements regarding insurable interest are correct except.
The beneficiary of a life insurance policy must have an insurable interest in the insured when the insured dies.
What increases coverage or provides additional coverage to an existing policy and are not considered to be one of the basic, or standard, sections of a policy.
Riders and endorsements,
Umbrella insurance coverage
comes in $1 million increments. Underlying insurance is used first, and then this coverage kicks in, with little specification of liabilities covered. Protects against automobile and general liability.
An individual can still be sued for this even if he behaves responsibly and hasn’t done anything wrong.
negligence
Who determines whether an insurance company will cover a given risk?
This person is a legal representative of the insurance company.
An agent
Who is a representative of the buyer of insurance and cannot legally bind an insurance company?
Broker
What is an example of speculative risk?
Stock market investment.
can result in either a loss or gain, such as investing in the stock market. There is an opportunity for either a gain or a loss.
What kind of risk is a swimming pool, home in a flood plain, and a builing in a hurricane zone.
pure risk
When only a loss or no loss can occur, such as property or liability risk.
Who tends to work in one area or the other. The insurance field has one area that deals with life- and health-related coverage and another that deals with property and casualty coverage.
insurance agent.
Which policy duties are these?
Cooperate with any investigation, submit any required proof of loss, provide the insurer with authorization to examine medical records and other pertinent records.
Personal auto policy (PAP)
Providing emergency care to injured parties is not a requirement of a PAP.
Most states require liability insurance, but they do not require collision insurance.
Auto insurance may be low such as $25,000 or $50,000. Should be higher to be sufficient.
Which policies are sold by stock companies only
Nonparticipating policies. Mutual companies cannot sell nonparticipating policies.
Would an estranged son living in another state be considered an insured?
No, driver must live in your home or have your permission.
What insurance was designed to provide personal catastrophic liability protection.
Comprehensive personal liability insurance (umbrella liability)
Exclusions include workers’ compensation – comprehensive personal liability policy, not meant to cover workers.
