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Adjuster License > Things you should know > Flashcards

Things you should know Flashcards

1
Q

There are six unique characteristics of insurance contracts:

A
  1. Personal Contract
  2. Contract of Adhesion
  3. Utmost Good Faith Contract
  4. Aleatory Contract
  5. Unilateral Contract
  6. Conditional Contract
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2
Q

There are six unique characteristics of insurance contracts:

  1. Personal Contract
A

● It protects the policyholder from financial losses
● It does not protect property from becoming damaged
● Coverage follows the person, not the property

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3
Q

There are six unique characteristics of insurance contracts:

  1. Contract of Adhesion
A

● The insurer is responsible for the terms of the contract
● The insured has no say in the wording
● Courts favor the insured in the event of an ambiguity

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4
Q

There are six unique characteristics of insurance contracts:

  1. Utmost Good Faith Contract
A

● Applicants are expected to be completely honest about the risk to the insurer
● The insurer must rely on applicants not to conceal or misrepresent pertinent
fact

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5
Q

There are six unique characteristics of insurance contracts:

  1. Aleatory Contract
A

depending on an unknown future event
● Neither party can know future losses
● Insurer only has to pay if and when covered losses occur
● Policyholders could pay more in premiums than they ever get for claims, or insurer could pay more in claims than it receives

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6
Q

There are six unique characteristics of insurance contracts:

  1. Unilateral Contract
A

● The insurer has an obligation to pay for covered losses
● The insured has no obligation (he can stop paying premiums)

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7
Q

There are six unique characteristics of insurance contracts:

  1. Conditional Contract
A

● The insurer only has to perform if certain conditions are met (such as a
covered loss)
● The insured must fulfill all conditions listed in the policy

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8
Q

Risk: two meanings

A
  1. The potential for financial loss; being exposed or open to damage
  2. An insured item
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9
Q

Speculative Risk:

A

● Undertaken with no certainty of either gain or loss
● Made knowingly, by conscious choice
● Cannot be insured

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10
Q

Pure Risk:

A

● Risk with no chance of gain
● Only two possible results: 1) loss or 2) no loss
● No chance of gain
● Can be insured

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11
Q

Hazard vs. Exposure:

A

● Exposure is the possibility of loss
● Hazards are things that increase that possibility
● More Hazards = Higher Exposure

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12
Q

Principle of Indemnity

A

Restoration to previous financial condition; no more, no less

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13
Q

Insurer Classifications (4)

A
  • Government
  • stock
  • private
  • Mutual
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14
Q

Insurer Classifications: Government

A

mandatory, run by gov, suited to needs of general public

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15
Q

Insurer Classifications:

Private

A

offer insurance products based on customer preferences

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16
Q

Insurer Classifications:

Stock

A

publicly traded; stockholders participate in dividends (non-participating)

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17
Q

Insurer Classifications:

Mutual

A

no stockholders; policyholders participate in dividends (participating)

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18
Q

Other Private Insurers (4):

A
  • reciprocal insurer
  • re-insurer
  • fraternal benefit society
  • risk retention group
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19
Q

Other Private Insurers (4): reciprocal insurer

A

group of people or organizations that insure each other

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20
Q

Other Private Insurers (4): re-insurer

A

insurance for insurers

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21
Q

Other Private Insurers (4): fraternal benefit society

A

non-profit, mutual aid organization that will usually offer
insurance benefits to members and their families

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22
Q

Other Private Insurers (4): risk retention group

A

an alternative to traditional insurance, owned by its members;
provides liability coverage for multiple companies in the same business.

23
Q

Basic(SFP)
Coverage

A

-Fire
-Lightning

24
Q

Extended Coverage

A

Fire & Lightning+
-Windstorm
-Hail
-Explosion
-Riot or civil commotion
-Vehicles
-Aircraft
-Volcanic eruption
-Smoke

25
Q

Broad Form Coverage

A

Extended Coverage Perils+
-Vandalism or malicious mischief
-Theft
-Falling objects
-Weight of ice, snow, or sleet
-Damage from a steam or hot water system
-Accidental discharge or over flow of water or steam
-Freezing of plumbing, heating, air
conditioning systems, or domestic
appliances
-Sudden and accidental damage from
artificially generated electrical current
-Sudden and accidental tearing apart, cracking, burning or bulging

26
Q

HO-7

A

“Mobile Home Form”

27
Q

HO-7 “Mobile Home Form”

A

Similar to HO-3,but for mobile homes; provides open peril coverage for dwelling and other structures and named peril coverage for personal property (covered perils vary by insurer)

28
Q
  1. Personal Contract
  2. Contract of Adhesion
  3. Utmost Good Faith Contract
  4. Aleatory Contract
  5. Unilateral Contract
  6. Conditional Contract
A

There are six unique characteristics of insurance contracts:

29
Q

● It protects the policyholder from financial losses
● It does not protect property from becoming damaged
● Coverage follows the person, not the property

A

There are six unique characteristics of insurance contracts:

  1. Personal Contract
30
Q

● The insurer is responsible for the terms of the contract
● The insured has no say in the wording
● Courts favor the insured in the event of an ambiguity

A

There are six unique characteristics of insurance contracts:

  1. Contract of Adhesion
31
Q

● Applicants are expected to be completely honest about the risk to the insurer
● The insurer must rely on applicants not to conceal or misrepresent pertinent
fact

A

There are six unique characteristics of insurance contracts:

  1. Utmost Good Faith Contract
32
Q

depending on an unknown future event
● Neither party can know future losses
● Insurer only has to pay if and when covered losses occur
● Policyholders could pay more in premiums than they ever get for claims, or
insurer could pay more in claims than it receives

A

There are six unique characteristics of insurance contracts:

  1. Aleatory Contract
33
Q

● The insurer has an obligation to pay for covered losses
● The insured has no obligation (he can stop paying premiums)

A

There are six unique characteristics of insurance contracts:

  1. Unilateral Contract
34
Q

● The insurer only has to perform if certain conditions are met (such as a
covered loss)
● The insured must fulfill all conditions listed in the policy

A

There are six unique characteristics of insurance contracts:

  1. Conditional Contract
35
Q
  1. The potential for financial loss; being exposed or open to damage
  2. An insured item
A

Risk: two meanings

36
Q

● Undertaken with no certainty of either gain or loss
● Made knowingly, by conscious choice
● Cannot be insured

A

Speculative Risk:

37
Q

● Risk with no chance of gain
● Only two possible results: 1) loss or 2) no loss
● No chance of gain
● Can be insured

A

Pure Risk:

38
Q

● Exposure is the possibility of loss
● Hazards are things that increase that possibility
● More Hazards = Higher Exposure

A

Hazard vs. Exposure:

39
Q

Restoration to previous financial condition; no more, no less

A

Principle of Indemnity

40
Q
  • Government
  • stock
  • private
  • Mutual
A

Insurer Classifications (4)

41
Q

mandatory, run by gov, suited to needs of general public

A

Insurer Classifications: Government

42
Q

offer insurance products based on customer preferences

A

Insurer Classifications:

Private

43
Q

publicly traded; stockholders participate in dividends (non-participating)

A

Insurer Classifications:

Stock

44
Q

no stockholders; policyholders participate in dividends (participating)

A

Insurer Classifications:

Mutual

45
Q
  • reciprocal insurer
  • re-insurer
  • fraternal benefit society
  • risk retention group
A

Other Private Insurers (4):

46
Q

group of people or organizations that insure each other

A

Other Private Insurers (4): reciprocal insurer

47
Q

insurance for insurers

A

Other Private Insurers (4): re-insurer

48
Q

non-profit, mutual aid organization that will usually offer
insurance benefits to members and their families

A

Other Private Insurers (4): fraternal benefit society

49
Q

an alternative to traditional insurance, owned by its members;
provides liability coverage for multiple companies in the same business.

A

Other Private Insurers (4): risk retention group

50
Q

-Fire
-Lightning

A

Basic(SFP)
Coverage

51
Q

Fire & Lightning+
-Windstorm
-Hail
-Explosion
-Riot or civil commotion
-Vehicles
-Aircraft
-Volcanic eruption
-Smoke

A

Extended Coverage

52
Q

Extended Coverage Perils+
-Vandalism or malicious mischief
-Theft
-Falling objects
-Weight of ice, snow, or sleet
-Damage from a steam or hot water system
-Accidental discharge or over flow of water or steam
-Freezing of plumbing, heating, air
conditioning systems, or domestic
appliances
-Sudden and accidental damage from
artificially generated electrical current
-Sudden and accidental tearing apart, cracking, burning or bulging

A

Broad Form Coverage

53
Q

“Mobile Home Form”

54
Q

Similar to HO-3,but for mobile homes; provides open peril coverage for dwelling and other structures and named peril coverage for personal property (covered perils vary by insurer)

A

HO-7 “Mobile Home Form”

Adjuster License (11 decks)

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