2022 Texas Adjuster Study Guide 367 QUESTIONS ANSWERS ALL CORRECT

2022 Texas Adjuster Study Guide 367 QUESTIONS ANSWERS ALL CORRECT 1 / 31 1. PERILS: A CAUSE OF PROPERTY LOSSES UNDER AN INSURANCE CONTRACT EX: WINDSTORM, HURRICANE, EXPLOSION, COLLAPSE OF BUILDING, VANDALISM, ACCIDENTAL DISCHARGE, AND THEFT 2. LAW OF LARGE NUMBERS: A FUNDAMENTAL CONCEPT IN STATISTICS AND PROBABILITY THAT DESCRIBES HOW THE AVERAGE OF A RANDOMLY SELECTED LARGE SAMPLE FROM A POPULATION. IT BASICALLY RELIES ON THE PRINCIPLE THAT THE LARGER THE POOL, THE MORE PREDICTABLE THE AMOUNT OF LOSSES WILL BE IN A GIVEN PERIOD 3. PRINCIPLE OF INDEMNITY: IS AN INSURANCE PRINCIPLE STATING THAT AN INSURED MAY NOT BE COMPENSATED BY INSURANCE COMPANY IN AN AMOUNT EXCEEDING THE INSURED'S ECONOMIC LOSS. 4. LIMITS OF LIABILITY: THE MAXIMUM AMOUNT THAT AN INSURANCE POLICY WILL PAY. IT IS SPECIFIED ON THE POLICY DECLARATION PAGE. 5. PROPERTY INSURANCE: COVERAGE FOR REAL AND PERSONAL PROPERTY AGAINST LOSS OR DAMAGE FROM PERILS INSURED AGAINST. 6. LOSS SETTLEMENT: THE PROCESS USED TO DETERMINE THE AMOUNT OF THE LOSS 7. ACTUAL CASH VALUE: THE VALUE OF THE PROPERTY BASED ON THE CURRENT COST TO REPLACE IT MINUS DEPRECIATION. 8. AGREED VALUE: THE AMOUNT THAT THE INSURED AND INSURER AGREE UPON DURING THE TIME OF POLICY INCEPTION. 9. REPLACEMENT COST: THE COST ASSOCIATED WITH REPLACING PROPERTY AT CURRENT MARKET PRICES 10. MARKET VALUE: THE AMOUNT THAT THE PROPERTY IS WORTH IN A COMPETITIVE MARKET. THIS AMOUNT IS ACCEPTED BY THE BUYER AND SELLER. 11. TORT: IS A WRONG THAT INVOLVES A BREACH OF CIVIL DUTY OWED TO SOMEONE ELSE.THIS BREACH DETERMINES IF THAT PERSON IS NEGLIGENCE. 12. ELEMENTS USEDTO DETERMINE NEGLIGENCE: A DUTY OWED, A DUTY BREACHED, PROXIMATE CAUSE, AND DAMAGES 13. METHODSTO DETERMINE LOSS ARE:: ACV, MARKETVALUE, REPLACEMENT COST, AGREED VALUE 14. CASUALTY INSURANCE: PROTECTS A PERSON FROM FINANCIAL LOSS ARISING FROM BODILY INJURY OR PROPERTY DAMAGE TO OTHERS 2022 Texas Adjuster Study Guide 367 QUESTIONS ANSWERS ALL CORRECT 2 / 31 15. HAZARD: IS A SITUATION THAT POSES A LEVEL OF THREAT TO LIFE, HEALTH, PROPERTY, OR ENVIRONMENT. 16. INDIRECT LOSS: TYPE OF LOSS THAT DOES NOT RESULT FROM DIRECT DAMAGE OF A COVERED CAUSE OF LOSS OR PERIL BUT IS INSTEAD A CONSEQUENCE OF THE DIRECT DAMAGE LOSS. 17. DIRECT LOSS: DIRECT PHYSICAL LOSS TO PROPERTY 18. INSURING AGREEMENT: THIS SECTION OF THE INSURANCE POLICY SPECIFIES WHAT THE INSURANCE WILL PROVIDE COVERAGE FOR IN EXCHANGE FOR PREMIUM PAYMENTS BY THEIR CUSTOMER. 19. DEDUCTIBLE: THE AMOUNT THE INSURED MUST PAY IN A LOSS BEFORE ANY PAYMENT IS DUE FROM THE INSURANCE COMPANY. 20. WHERE IS A HOMEOWNER PERCENTAGE DEDUCTIBLE ALWAYSTAKEN FROM?: COVERAGE A STRUCTURE POLICY LIMITS OF LIABILITY THAT IS USED ON THE DECLARATION PAGE. 21. CANCELLATION: IS THE TERMINATION OF AN INSURANCE POLICY BY EITHER SIDE AND IT MUST BE DONE IN WRITING 22. LIABILITY: A PERSON IS LEGALLY LIABLE FOR AN ACCIDENT IF THAT PERSON IS FOUND RESPONSIBLE FOR BODILY INJURY OR PROPERTY DAMAGE TO ANOTHER PARTY. 23. NEGLIGENCE: THE FAILURE TO EXERCISE THE CARE THAT A REASONABLY PRUDENT PERSON CAN BE CHARACTERIZED BY THE AVERAGE PERSON. 24. ADDITIONAL LIVING EXPENSES: CHARGES COVERED BY HOMEOWNERS POLICY OVER AND ABOVE POLICY HOLDERS CUSTOMARY LIVING DUE TO DAMAGE BY A COVERED PERIL AND MAKES THE HOME TEMPORARY UNINHABITABLE. 25. EXPOSURE: THE MEASURE OF THE POSSIBILITY OF THE LOSS 26. INSURED: THE PARTYTO AN INSURANCE ARRANGEMENT THAT HAS AN INSURABLE INTEREST IN THE PROPERTY THAT IS BEING INSURED. 27. INSURER: INSURANCE COMPANY 28. LOSS HISTORY: IS THE INSURED HISTORY OF LOSSES WITH OTHER COMPANIES. INSURANCE COMPANY VIEWS THIS AS INDICATION OF INSURED PROPENSITY FOR A CLAIM IN FUTURE. 2022 Texas Adjuster Study Guide 367 QUESTIONS ANSWERS ALL CORRECT 3 / 31 29. NOTICE OF LOSS: NOTICE REQUIRED BY THE INSURANCE COMPANY IMMEDIATELY AFTER AN INCIDENT. POLICY HOLDER RESPONSIBILITY AFTER A LOSS 30. DEPRECIATION: ACT OF LOWERING AN ITEM DUETO VALUE WEAR AND TEAR IT IS BASED ON AGE, CONDITION, AND LIFE EXPECTANCY. 31. PUNITIVE DAMAGE: THE AMOUNT AWARDED BY THE COURT WHICH IS INTENDED TO REFORM OR DETER THE DEFENDANT FROM ENGAGING IN SIMILAR CONDUCT IN THE FUTURE 32. COMPARATIVE NEGLIGENCE: IS A PARTIAL LEGAL DEFENSE THAT REDUCES THE AMOUNT OF DAMAGES THAT A PERSON CAN RECOVER BASED UPON THE AMOUNT THAT THIS PERSON'S OWN NEGLIGENCE CONTRIBUTED TO THE LOSS 33. CONTRIBUTORY NEGLIGENCE: IS A LAW DEFENSE WHERE A PERSON NEGLIGENCE CONTRIBUTED TO THE HARM THAT HE OR SHE SUSTAINED 34. ASSUMPTION OF RISK: A doctrine under which a plaintiff may not recover for injuries or damage suffered from risks he or she knows of and has voluntarily assumed 35. ADVERSE SELECTION: THE TENDENCY OF INSURED'S WHO PRESENT A HIGHER PROBABILITY OF LOSS TO PURCHASE OR RENEW INSURANCE MORE OFTEN THAN THOSE WHO PRESENT A LOWER PROBABILITY 36. ATTRACTIVE NUISANCE: A dangerous place, condition, or object that is particularly attractive to children. 37. ACCIDENT: UNFORESEEN, UNINTENDED EVENT, SOMETHING UNEXPECTED 38. OCCURRENCE: AN EVENT THAT RESULTS IN AN INSURED LOSS WHICH RESULTS IN BODILY INJURY OR DAMAGES 39. BETTERMENT: IMPROVEMENT OF PROPERTY THAT PUTS IT IN A BETTER CONDITION THAN IT WAS BEFORE THE OCCUPANCY OR LOSS 40. ALL RISK INSURANCE: "open perils" insurance - protecting the insured from loss arising from any peril other than those perils specifically excluded by name 41. APPRAISAL: IS A FORM OF DISPUTE RESOLUTION THAT OCCURS WHEN THERE IS A DISPUTE BETWEEN THE INSURED AND THE INSURANCE COMPANY REGARDING THE AMOUNT OF THE CLAIM OR LOSS. BOTH PARTIES HIRE AN APPRAISAL AND IF CANT DECIDE THEN THEY WILL HIRE AN UMPIRE