Insurance Flashcards
Broker
Represents insured
Works with many different ins companies
Broker liable for the business
Agent
Represents the insurer
Captive. Legal liability passes from agent to insurer
Agent is the insurance co
General agent
Independent business
Sells in specified territories
Appts sub agent
Express
In the contract
Implied
Assumed to have to contract business
Apparent
Appearance assumption of authority
Negligence of principal be keeping books
Adjustor
Investigate loss Determine payment Determine liability Be fair Public works for insured
Public adjuster
Works for insured
Actual cash value
Replacement. Replacement less depreciation determined by adjustor
Participating vs non participating
Mutual can only sell participating. Policy holders are shareholders. Non taxable return of premium. Dividends go back to policy holders
Stock can sell non par and participating. Shareholder non pr policies
Risk management
Identify risk management Gather data Analyze info construct risk mgt Implement plan Monitor update plan
Rules
Don’t risk more than you can afford to lose
Consider odds. Too expensive to insure
Don’t risk a lot for a little
Don’t save a few bucks on a premium to get insurance
Do not insure
Insurability risk
Law of large nos
Accidental
Definite and measurable
Cannot be catastrophic
Risk. Peril. Hazard
Possibility
Cause of loss
Increases the likelihood loss
Methods of handling risk
High severity high frequency. Risk avoid risk reduction. Reduction
High severity low frequency. Heart attack. Risk transfer
Low severity. High frequency. Park car risk retention reduction
Low severity low frequency. Risk retention paper cuts.
Risk sharing. Transferring risk to entity Incorporation or deductibles
