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.