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P&C Exam > P&C BASIC > Flashcards

P&C BASIC Flashcards

1
Q

Insurance means what

A

Transfer of risk

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2
Q

Chance of loss or gain; not insurable

A

Speculative risk

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3
Q

Chance of loss only; insurance companies will insure

A

Pure risk

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4
Q

Is physical loss to property with no intervening cause

A

Direct loss

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5
Q

This is also called proximate cause of loss

A

Direct loss

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6
Q

Is a consequential loss as the result from a direct loss

A

Indirect loss

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7
Q

Is the possibility that a loss will occur

A

risk

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8
Q

A single policy that covers multiple classes

A

blanket

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9
Q

A policy that covers a certain thing or its own amount of coverage

A

Specific

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10
Q

Anything that increases the chance that a loss will occur

A

Hazard

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11
Q

Arise from material, structural, or operational features of risk situation

A

Physical

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12
Q

Intentionally causing a loss; lying

A

Moral hazard

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13
Q

Carelessness; Indifference of loss

A

Morale Hazard

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14
Q

Owned by policyholders

A

Mutual insurer

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15
Q

Owned by stockholders

A

Stock insurer

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16
Q

Known as Risk Selection Process

A

Underwriting

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17
Q

Cause of loss

A

Peril

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18
Q

Is the tendency for higher-risk individuals to get and keep insurance as compared to individual that represent an average level of risk

A

Adverse selection

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19
Q

Is insurance for insurers; transfer risk from one insurer to another insurer

A

Reinsurance

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20
Q

retaining, rather than transferring risk

A

self-insurance

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21
Q
  • War risk insurance
  • Nuclear energy liability insurance
  • Flood Insurance
  • federal crop insurance
  • unemployment insurance
  • worker’s compensation
A

Federal government

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22
Q

State where a company is incorporated

A

Domestic

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23
Q

Company is incorporated in another state or U.S. territory

A

Foreign

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24
Q

Company is incorporated in another country

A

Alien

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25
Q

Individual that sell insurance products of several companies

A

Independent agents

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26
Q

Individual that represent only one company

A

Captive agents

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27
Q

Is a written contract

A

Express Authority

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28
Q

Is assumed by insurer

A

Implied Authority

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29
Q

Is assumed by customer; perceived

A

Apparent Authority

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30
Q

Known as offer & acceptance

A

agreement

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31
Q

Customer submits & application

A

offer

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32
Q

insurer issues policy

A

acceptance

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33
Q

is a relationship in which one person is authorize to represent and act for another person, or for a corporation

A

Agency

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34
Q

person authorized to act on behalf of the other

A

Agent

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35
Q

the person whose behalf the agents acts

A

principal

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36
Q

the insurance agent acts on behalf of the principal (insurance company)

A

Agency

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37
Q

Is a person in a position of financial trust

A

fiduciary

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38
Q

Competent parties are…..

A

1) Legal age
2) mentally sane
3) Not under the influence

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39
Q

Both parties bring something of value

A

Consideration

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40
Q

Insurers write the policy customer either takes it or leave it

A

Adhesion

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41
Q

Unequal exchange; customer pays small monthly premium premium; insurer pays large claims

A

Aleatory

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42
Q

Both parties have rules & duties they have to follow

A

Conditional

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43
Q

Statement an applicant believes to be true

A

representation

44
Q

Did not mean to lie

A

misrepresentation

45
Q

Contract between you and the insurer

A

personal

46
Q

one sided promise, only the insurer is legally bound to do anything

A

unilateral

47
Q

failure to disclose a known fact

A

concealment

48
Q

medical bills & loss of wages after an accident

A

special damage

49
Q

pain & suffering, mental anguish-very subjective

A

general damages

50
Q

Obviously dangerous
EX: pet tiger; swimming pool

A

Absolute liability

51
Q

Strictly products

A

Strict Liability

52
Q

Parents/Employers are responsible

A

Vicarious Liability

53
Q

To restore the insured to the financial state they enjoyed before loss occurred

A

Indemnity

54
Q

False information must have been a determining factor in the insurer’s decision to accept the risk

A

Material misrepresentation

55
Q

Intentional act designed to deceive and induce another party to part with something of value

A

Fraud

56
Q

Intentional voluntary giving up of a known right

A

Waiver

57
Q

Once waiver has been created it cant be changed

A

Estoppel

58
Q

Most amount of $ the insured can collect under the policy

A

Policy limits

59
Q

Terminating an in force policy

A

Cancellation

60
Q

Terminating of policy at expiration

A

Nonrenewal

61
Q

Early cancellation before expiration

A

Short rate

62
Q

insured will receive a portion of the premium back

A

pro rata

63
Q

A policy is canceled on the effective date either by insurer or insured

A

Flat cancellation

64
Q

The amount of $ the insured pays first before the insurer pays

A

deductible

65
Q

the MAX AMOUNT of $ the insured can collect under the policy

A

Limits of Liability

66
Q

pay a fair share of loss to protect indemnity

A

other insurance

67
Q

No people; No Stuff

A

Vancancy

68
Q

No people; Yes stuff

A

Unoccupied

69
Q

Max Available $ on the policy for all claims

A

Aggregate

70
Q

Insurance for insurers; transfer risk from one insurers to another insurer

A

reinsurance

71
Q

Policy cannot be transferred without written consent from the insurer

A

Assignment

72
Q
  • Maximum per each accident
  • sublimit of liability for each accident
A

per occurrence

73
Q

Condition found in property insurance contracts that provides that if the insurer broadens coverage under a policy form or endorsement without requiring an additional premium, then all existing similar policies or endorsements will be construed to contain the broadened coverage

A

Liberalization

74
Q

Is the transfer to the insurance company of the insured’s right of recovery against others

A

Subrogation

75
Q

Is a temporary oral or written statement made by the agent that gives the insured immediate coverage for a specified time

A

Binder

76
Q

A single policy that covers multiple classes

A

Blanket insurance

77
Q

A policy that covers a certain thing or its own amount of coverage

A

Specific Insurance

78
Q

A group-owned insurer whose main activity is risk sharing

A

Reciprocal Insurance

79
Q

A group-owned insurer that primarily assumes and spreads the liability-related risks of its members

A

Risk-retention group

80
Q

Assume the financial risk one’s self

A

Self-insurer

81
Q

Protects consumer privacy

A

Fair Credit Reporting Act

82
Q

Protection financial privacy

A

Gramm leach

83
Q

Reduction, decrease, or disappearance of value

A

Loss

84
Q

A policy form that alters or adds to the provision of a property and casualty insurance contract

A

endorsement

85
Q

What a reasonable and prudent policy owner would expect

A

reasonable expectation doctrine

86
Q

A sudden, unforseen, unintended, and unplanned event from which loss or damage result

A

accident

87
Q

An accident includes continuous or repeated exposure to the same general harmful conditions

A

occurrence

88
Q

A person or any organization to which property has been entrusted, usually for repairs, serving or storage

A

bailee

89
Q

A person or organization that entrust property to a bailee

A

bailor

90
Q

Taking of property inside the premises locked safe or vault by a person who commits forcible entry into, or exit from, the property of another while trespassing

A

burglary

91
Q

Insured does not agree with the insurer’s decision regarding a claim, what process helps decide the outcome

A

Arbitration

92
Q

The cost to replace property with property of like kind & quality, at current pricing, without a deduction for depreciation

A

replacement value

93
Q

The cost to repair or replace property at its replacement value, minus depreciation

A

Actual cash value (ACV)

94
Q

The insurance company and insured agree to a specific value of a particular property before the policy is issued

A

Agreed value

95
Q

A valuation method that states the value of a particular property on the declaration page, but provides for the insurer to pay the lesser of the stated value or ACV of the property following a loss

A

stated value

96
Q

The price a willing buyer would pay for property purchased from a willing seller

A

market value

97
Q

Insures one or more items of property on a single policy and the amount of insurance applying to each item is shown on a schedule

A

Scheduled limit

98
Q

Addresses disputes about the amount of a loss

A

Appraisal

99
Q

Receives the broadest coverage of all persons or organizations protected by a policy

A

Named insured

100
Q

Reduces the amount paid in a partial loss as total losses are paid based on the coverage limit on the policy

A

Coinsurance

101
Q

Is a civil wrong committed by one person against another

A

tort

102
Q

Is a common law defense used by the defendant when the injured party is partially responsible for his own injuries

A

Contributory negligence

103
Q

The ____ limit of liability applies to bodily injury, property damages, or both

A

combined single

104
Q
  • Assume the responsibility of loss
A

Retention

105
Q

Primarily assumes & spreads the liability related risks of its members

A

Risk retention group

106
Q

To assume the financial risk one’s self

A

Self insurer

P&C Exam (11 decks)

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