The Larger the Number of similar risks that are combined in a group, the more predictable will the future expected losses is called what ?

Adverse Selection

A high-risk person benefits more from insurance, so is more likely to purchase it.

Estoppel

A legal impediment to denying a fact or restoring a right that has been previously waived.

Law of Large Numbers

A principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss.

Contributory Negligence

A rule in tort law, used in only a few states, that completely bars the plaintiff from recovering any damages if the damage suffered is partly the plaintiff's own fault.

Pure Risk

A situation in which there are only the possibilities of loss or no loss

Concurrent Causation

A situation where there are 2 causes resulting in a loss and 1 of the causes is excluded while the other cause is not excluded. Unless the policy specifies otherwise, the loss is covered. Example: a policy that excludes earth movement will still pay a loss due to for or explosion that ensues directly from the earth movement.

Vicarious Liability

Legal doctrine under which a party can be held liable for the wrongful actions of another party.

Monoline Policy

Policy that covers only one line of business

Methods of risk management include:

Sharing transfer avoid Reduce Retain

Named Peril Form lists what?

The form that lists covered perils such as basic form or broad form

Speculative Risk

The possibility of loss or gain

Subrogation

The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt. (Title company)

Concealment

The withholding of known or unknown facts which, if material, can void a contract.

extended coverages (EC) list what (WHARVES)?

Windstorm, Hail, Aircraft, Riots, vehicles, Explosions, Smoke

tort

a legal wrong other than a crime or a breach of contract

insurance broker

a person that represents the client and insured and secures coverage and does not sell insurance

express warranty

a written explanation of the producer's responsibilities in the event that a product is found to be defective or otherwise unsatisfactory

Aleatory Contract

an insured may receive more or less than what they paid for

adhesions

any ambiguity in the contract will be determined in favor of the insured take it or leave it contract.

Fidelity Bond

insurance policy that pays the employer money in the case of employees' theft

Liberalization Clause

insurer is permitted to change the terms of the contract at any time as long as the change benefits the insured and no additional premium is charged

actuarial

is part of the insurance that is responsible for keeping an insurance company financially stable or sound

Aggregate Limit

maximum a policy will pay for all claims during a policy period

Fiduciary

premiums held in a trust

jettison

to cast overboard; to discard