General insurance Questions (1)

Pure Risk

I situation in which a person can experience only loss and no game presents what type of risk?

When the insurance application is submitted

In insurance contacts, when is the offer usually made?

Insurer

In the agent/insurer relationship, who is considered the principal?

Unequal values are exchanged between the parties to a contract

Insurance contracts are aleatory nature. What does that mean?

Speculative Risk

Wagering at a sporting event is known as what type of risk?

1) agreement (2) consideration (3) competent parties (4) legal purpose

What are the four elements of an insurance contract?

Alien, Domestic, Foreign

insurers are classified according to their domicile. what are the three types of insurers?

Morale, moral, physical

What are the three types of hazards?

Certificate of Authority (CA)

What document is required for an insurance company to transact insurance?

certain expectations for coverage that a reasonable person would have based on sources other than just the policy language.

What does the term reasonable expectation mean in insurance?

A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise.

What does the term unilateral contract mean?

Uncertainty of loss

What is a risk?

an absolute true statement upon which the validity of the policy depends

What is a warranty insurance contract?

Promise to pay in the event of a loss

What is consideration on the part of the insurer?

Apparent Authority

What type of authority is based on the agents actions, or words?

Foreign

What type of insurer is formed under the laws of another state?

It would be considered for if you were material and intentional

When would a misrepresentation on insurance application be considered fraud?

Agent or Producer

according to the law of agency, who represents the principal?

Apparent, Express, Implied

what are the three types of agent authority?

insurance

what do individuals use to transfer the risk of loss to a larger group?

to restore an insured to the same financial status as before a loss

what does indemnify mean in insurance?

consideration is something of value that each party gives to the other consideration on the part of the insurer is binding

what is consideration in an insurance contract?

Peril

what is the term for the causes of loss insured against in a insurance policy?

indemnity

what provision states that if a policy allows for greater benefits than the financial loss incurs, the insured may be compensated only for the amount lost?

peril

A tornado that destroy the property would be an example of what?

When the insurance approves a prepaid application

And insurance contracts, when does acceptance usually occur?

1) Avoidance (2) transfer (3) sharing (4) retention (5)reduction

What are the methods of managing risk?

Hazards

Conditions that increase the cost of the loss are known as what?

Authorized or Admitted

If an insurer hold a certificate of authority, it is known as what type of insurer?

1) due to chance (2) definite and measurable (3) statically predictable (4) not catastrophic (5) coverage cannot be mandatory

What are the five characteristics of an ideally insurable risk?