LIMITED LINES TEST

Agent

An individual authorized by an insurer to solicit app or to negotiate insurance on its behalf.

Mutual Companies

Are owned by policy holders

Deductibles

Are used to prevent covered small claims, it helps by reducing the premium

Admitted Insurer

Authorized to sell insurance. Granted a certificate of authority from the dept of insurance

Temporary Licenses

Commissioner May issue this license without examination. May be obtained before a person passes the state exam if the person completes a 40-hour course before applying for the license or within 14 days after applying for the license. Good for no more than 90 days.

Pro Rate

Deals with returned premiums

Avoidance

Eliminate the exposure-underwriting rejects a policy

Non resident Agent

If properly licensed in their home state, may work in any other state with that license (if allowed) or must pay the proper fees, file proper forms, and furnish a letter of good standing from their home state.

ISR

Insurance Service Representative

Certificate of Authority

Insurance companies meeting requirements of Texas law are granted this certificate, and then are referred to as an admitted or authorized carrier.

Retention

Insured assumes all or part of the risk - DEDUCTIBLE

The Commissioner Of Insurance

Is appointed by the governor for a 2 year tern subject to the advice and consent of senate

Underwriting Dept

Is the Dept. in an insurance company that elevates proposed risks that the insurance company intent to insure. They 'rate' or determine the price of the insurance for each category/ class of risk

Salvage

Is totaled out property deemed NOT repairable by the insurance company

False Information and Advertising

Is using advertising, announcements, or statements which are untrue deceptive, or misleading

Tort

Law is civil wrong other than a branch of contract

LRA

Local Recording Agent Can solicit; bind coverage, sign policies, and direct solicitors and ISRs.

Defamation

Making any oral or written statement with is false

Independence

Many people must be exposed to the same or similar risk in order for the 'law of large numbers' to work. Ex:People who live in a "rural" area. Less populated.

Independence

Many people must be exposed to the same or similar risk in order for the 'law of large numbers' to work. People who live in a less- populated area (rural) are not as likely - as group- to have an auto accident a someone who lives in a large city.

Conditional Licenses

May be issued without having to wait for the results of a criminal history search ( fingerprint check ) If something comes up app will be revoked and shall refuse to issue permanent license.

Rebates

Offering to pay rebates of premium or any special favor valuable consideration as an inducement to purchase insurance

Actual Cash Value

Replacement cost - depreciation

Solicitor

Represents LRA

Indemnity

Restore and insure to the same financial condition they were in prior to the loss.

Indirect loss

The consequence of the direct loss. Ex: staying in a hotel after your house burned down.

Pure Risk

This deals with only the possibility of reduction in the value of something Ex: To Indemnify is to take a person who has sustained a loss and to put them back "financially" where they were before they suffered the loss .

Commissioner Duties and Powers

To administer , enforce, and carry out the provisions of the insurance code and laws

Transfer

Transfer risk from yourself to an insurance company - INSURANCE

Non admitted insurer

UNAUTHORIZED to sell insurance. DO NOT qualify for a certificate of authority, Often called Surplus lines insurance companies.

Arbitration

Used to realize claim disputes.

False Information and Advertising

Using advertisements, announcements, or statements which are untrue, deceptive, or misleading

Agreed Value

Values agreed on between the insured and the insurer at the same time the policy is issued

Sharing

When risk is pooled together and chance of loss is shared- PARTNERSHIP

Reduction

When the possibility or seriousness of the risk is reduced - ALARM

Misrepresentation

a false statement made by the insured

Representation

a written or oral statement made by the insured

Alien Insurer

companies organized under laws of another county ( MEXICO )

Foreign Insurer

companies organized under laws of another state ( FLORIDA )

Domestic Insurer

companies organized under the laws of a particular state ( TEXAS )

Fraud

intentional perversion of the truth

Accidental

losses must be a random event which the insured has no control over

Boycotting, Coercion, and Intimidation

monopoly in the business of insurance

Insuring Agreement

promise to pay covered perils

Conditions

rules of conduct duties and obligations of both the insurer and the insured

endorsements

the only ways to add delete or modify coverage

Exclusions

things are not covered on the policy

Subrogation

"Right of recovery " When an insured is involved Ina n accident, and another part is at fault, and the at fault party I le taking too long to pay the claim, the insureds company can subrogate

How many hours of completion does a licensee have to have to renew his or her license

10

Peril

A cause of loss. Ex: fire, theft, flood..

Proof of Loss

A document that must be submitted to an insurance company after with in 91 days

Market Value

A willing buyer and willing seller that agree on an amount in a piece of property, this is not a good insurance price