Terms & Regulations

Question 1

Low of large numbers

Answer 1

The larger the number of separate risks of a like nature combined into one group the more predictable the number of the future losses of that group within a given time.

Question 2

Insurance

Answer 2

Transferring pure risk (no gain)

Question 3

Insurable interest

Answer 3

Insurable interest is required at the time of loss in order to recover on the policy. (Lienholder)

Question 4

Risk

Answer 4

The uncertainty of loss

Question 5

Hazard

Answer 5

Something that increases the risk of loss

Question 6

Physical hazard

Answer 6

May result from material or structural features of a risk as opposite to human or management factors such as an oil he right left by the furnace

Question 7

Moral

Answer 7

A diss honest person is a moral hazard. A person who is not paying their credit card bills timely is the moral hazard (dishonestly)

Question 8

Morale

Answer 8

Careless

Question 9

Peril

Answer 9

The cause of loss

Question 10

Loss

Answer 10

Damage resulting to structure caused by Parral.

Question 11

Direct loss

Answer 11

For example a fire burns the house down. The burn down house is a direct loss

Question 12

Indirect lost

Answer 12

Sometimes called a consequential loss

Question 13

Market value

Answer 13

Depending upon the location of the property and the current market conditions

Question 14

Stated value

Answer 14

The insured chooses a limit of coverage for the property in the event of a loss

Question 15

Proximate cause

Answer 15

There must be a direct Chin of event leading from the negligent act up to the resulting injuries or Property damage in order for the negligent act to be considered the proximate cause

Question 16

Deductible

Answer 16

The amount the insured must pay on every claim

Question 17

Indemnity

Answer 17

The insured may not recover more than he or she actually lost (no more no less)

Question 18

Limits of liability

Answer 18

The policy limits (the Max insurance will pay)

Question 19

Coinsurance

Answer 19

Requirements sometimes called the 80% clause. this clause is designed to ensure that the insured carries adequate policy limits

Question 20

Occurrence

Answer 20

(Per occurrence) something covering over a period of time, but still covered by the policy.

Question 21

Cancellation

Answer 21

Cancellation may be done by either the insured or insurer. Cancellation is done mid term. If the insurer is canceling the policy mid term they must have a specific reason and given written advance notice of the cancellation.

Question 22

Non-renewal

Answer 22

Occurs at the policy anniversary date the insurer must give an insured advance written notice that their policy will not be renewed. (No premium refund is due)

Question 23

Vacancy

Answer 23

Occurs when the insured has moved out and taking all his or hers belongings

Question 24

Unoccupancy

Answer 24

When the insured is on vacation or trip