Unit 2 Flashcards
Aleatory
Depends on chance,uncertain to occur. Uneven exchange of values
Risk
Is the possibility (uncertainty) that a loss might occur
Franchise marketing system
Allow employers to offer individual insurance to their employees at a lower premium
Mass Marketing
Direct response franchise Noninsurance and vending machine sales limited benefits and low premiums
Direct writing company
Pays salaries to employees whose job function is to sell its company’s product
Receptacle insurers
Are unincorporated groups providing insurance to one another
subscriber
Administrative underwriting sales promotions and claims handled by attorney-in-fact
Four elements of a contract
Consideration
Offer
acceptance of offer
legal purpose and capacity
Offer and acceptance equals agreement
Consideration
Exchange of something of value
Payment of premium for promised to pay loss
Doctrine of adhesion
If the insurance contract language is big or unclear any empty ambiguity will be construed in favor of insured
Concealment
Defined as the deliberate omission of material fact
Unilateral contract
Only the insurance company makes forcible promise
Aleatory
Outcome depends on chance
consideration exchange the not be equal
Insurable risk
five elements
Large number of homogenous units Lost must be calculable Uncertain Economic hardship Exclusion of catastrophic events
Manage risk
five elements
Avoid reduce retain share transfer two ways to transfer Sue negligent party, insurance
Purpose of insurance
To Restore the insured to his original position
