INSURANCE

What is a non-admitted insurer?

Not licensed to transact insurance business in the state.

What is a physical hazard ?

Physical condition that increases the chance of a loss.

Name 3 types of hazards

Physical, Moral, Morale

What 2 types of risk are there ?

Pure risk (Insurable) Speculative risk (Not Insurable)

What is adverse selection?

The tendency of poor risk to purchase insurance.

Aleatory

There is an unequal exchanges of value (Consideration).

What is domicile?

Where you actually live.

Warranties

guarantee material facts in the application.

What is a morale hazard?

indifference or carelessness

Fraud

intentional act designed to deceive.

What is moral hazard?

lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance.

Unilateral Contract

only one party is legally bound to perform its part of the arrangement.

Indemnity

restores an insured to the approximate condition existing before loss.

What is a hazard?

the increase of a chance that a loss will occur.

Mortality / morbidity tables

used to predict future losses from death/illness.

What is a peril?

Direct cause of loss.

What is A domestic company ?

Insurer incorporated under the laws of a home state.

What is a Alien Company?

Insurer incorporated under the laws of another country.

What is Foreign Company ?

Insurer incorporated under the laws of another state, district, or territory.

What is risk?

Is the uncertainty of loss. Buying insurance transfer risk.

What is an Admitted Insurer?

Licensed to transact insurance business in the state.

What are the 4 elements of a legal contract ?

(CLOAC) Consideration Legal Purpose Offer Acceptance Competent parties

What are Risk Management methods ?

S.T.A.R.R SHAIRING TRANSFER AVOIDANCE REDUCTION RETENTION

Representaion

Statement made by the applicant that is true to the best of the applicants knowledge.

Misrepresentation

Statement that is false and voids a contract if it is material to the risk insured.

Contract of Adhesion

The insured must accept the entire contract with all of its terms and conditions.