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Service Broker > Principle & Practices Of Insurance > Flashcards

Principle & Practices Of Insurance Flashcards

1
Q

Who owns a mutual insurance company?

A

The policy holder

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2
Q

What did Factory mutual insurance Companies specialize in?

A

Is fire risk management

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3
Q

How often will policies with aggregated Policies Limit pay out in claims?

A

Until the limit is used up for the term

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4
Q

How often will a policy with a current limit pay out On claims

A

Every time a loss occurs

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5
Q

What is the difference between an agent and Broker

A

An agent One company and A broker Deals with multiple companies

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6
Q

What is the difference between actual cash value and Replacement cost

A

Actual cash value is the replacement Cause less depreciation and replacement cost Is the cost of an item at time of loss without depreciation

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7
Q

What is a Bailee

A

Someone in care custody and control of Someone else’s property

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8
Q

What are four reasons of property insurance policy may automatically Assigned

A

Bankruptcy, Operation of law, Death and succession

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9
Q

What is binding authority and Grants it to a broker

A

A binding authority is an authority to put a contract of insurance in effect without contacting the insurer for permission and is granted by the insurer.

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10
Q

What are 3 elements? Necessary for contract of insurance only

A

Utmost good faith, indemnity and Insurable interest

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11
Q

What is a claim reserve

A

Once the claim is reported insurers are required to put money To pay the claim

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12
Q

To whom are the rights of suborgination grants once claimed if pay

A

The insurance company

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13
Q

What value is depreciation taken off in a settlement of claims on an actual cash value basis

A

It is taken off the replacement cost of the item at the time of the loss

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14
Q

Is approximate cause the last event That occurs and causes a loss

A

No. It is the immediate and Effective cause that of loss but not necessarily lash chain of events

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15
Q

What is earn premium? what is unearned premium?

A

Earned premium is the premium that used up well. Unpremium is premium that has yet to be used up

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16
Q

What is an endorsement used to do?

A

It’s used to change or amend a policy

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17
Q

What does exclusion mean

A

Not included

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18
Q

What types of refund is required when an insurer cancels and insurance policy

A

Pro rata

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19
Q

What type of refund is required when an insured cancels his insurance policy

A

Short rate

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20
Q

What is a franchise or disappearing deductible

A

A deductible that no longer exists once a loss reaches a certain amount

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21
Q

What is material fact

A

A fact that is so important that it determines its own whether a risk is acceptable or not and bases on which the premium will be determined.

22
Q

What is miss representation

A

A lie about material fact

23
Q

What is a hazard

A

A condition that may cause a loss to occur

24
Q

What are two types of hazard

A

Physical and moral

25
Q

When is the principle of general average used?

A

When cargo on a ship or car on a ferry are jettison. To save the ship or ferry, all insurers of the cargo or cars are not jettisons will contribute towards the loss

26
Q

What is a stock insurance company

A

An insurance company that trades on stock markets and owned by its shareholders

27
Q

Who makes up the group of syndicates in regards to lloyd’s of london

A

Investors

28
Q

What is common law based on?

A

Law of common people and precedents

29
Q

What is the statue law

A

Law enact by the government

30
Q

Who is the lessee? Who’s the lessor?

A

Lessee is a person leasing the car, and the lessor is the leasing company

31
Q

What is the lien?

A

Alone or financial Interest someone holds on a property

32
Q

How does mortgage class protect the mortgage e if the insurer violates the policy

A

If an insurer violates the policy, they will not receive any benefits from the policy but The insurable interest Of the mortgagee is protected

33
Q

What insurance coverage requires that the insured be negligent before it will pay out

A

Liability

34
Q

What is peril

A

An event that may cause a loss to occur

35
Q

What is risk? What type of risk can be insured

A

A risk is a chance of loss and only pure risk can be insured

36
Q

What is reinsurance

A

Insurance companies take out insurance on what they are insure

37
Q

What is a rate?

A

The price of a unit of insurance

38
Q

What are three types of policies required statutory conditions

A

Accident and sickness, auto and fire

39
Q

Who is the first party and who is the third party in contract of insurance

A

The first party Is the insured and the third party? Is anyone else involved in a claim from the insurance contract

40
Q

What is time on Risk

A

The length of time and day that the policy Has been enforced

41
Q

What is tort? What does it usually result in

A

A tort is a Legal wrong done against another and it usually results in the injured party suing the person for causing their injury

42
Q

What is The unearned premium reserve fund

A

A fund to guarantee an insurer’s Unearned premium as of any given valuation date

43
Q

What does a value policy do

A

It guarantees the amounts set out in the policy

44
Q

What’s the difference between a vacant and unoccupied

A

The intent to return or to not return

45
Q

What occurs when a policy is made Void

A

It is treated as if it was never existed, canceled back to the To the inception date, and all premiums are returned.

46
Q

An insurance policy will pay the lesser of these three things

A

Actual cash value, insurable interests and policy limits

47
Q

When does an insurance policy expire

A

12:01 am. on the date stated

48
Q

What is an example of contract Of compensation

A

A life insurance policy

49
Q

What is necessary when determining what name an insurance policy would be Set up in

A

The owner of the property of a vehicle, whether it be a person or an organization

50
Q

What is a writ

A

A notice that someone is being sued

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