SC P&C Insurance Exam Study Guide.pdf file:///C:/Users/HP/Desktop/TYPA%20NEW/SC%20P&C%20Insura
SC P&C Insurance Exam Study Guide
1. Abandonment
ANS the abdication of insured property into the hands of another, orinto the possession of no
one in particular
2. Absolute Liability
ANS Liability that arises from an extremely dangerous situation. Often found in cases involving
explosives. Also known as "strict" liability. For exam-ple, you are absolutely liable if you keep a
wild animal as a pet.
3. Accident
ANS an unplanned, unforseen event which occurs suddenly and at a spe-cific place
4. Actual CashValue
ANS the required amount to pay damages for property loss, whichis calculated based on the
property's current replacement value minus depreciation
5. Additional Coverage
ANS a provision in an insurance policy that allows for morecoverage for a specific loss
expense without an increase in premium
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6. Additional Insureds
ANS individuals or business that are not named as insured on the decleration page, butr are
protected by the policy, usually in regard to a specificinterest
7. Adhesion
ANS A contract offered on a "take-it-or-leave-it" basis by an insurer, in whichthe insured's only
option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor
of the insured.
8. Admitted Insurer
ANS An insurer to which a state insurance department has granteda license to do business
within that state.
9. Adverse Selection
ANS In general, the tendency for people with the greatest proba-bility of loss to be the ones
most likely to purchase insurance.
10. Agent
ANS an individual who is licensed to sell, negotiate, or effect insurance con-tracts on behalf of
an insurer
11. Aggregate Limit
ANS the maximum amount an insurer will pay for all covered lossesduring the covered policy
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period
12. AgreedValue
ANS A property policy with a provision agreed upon by the insurer andinsured as to the amount of
insurance that represents a fair valuation for the propertyat the time the insurance is written.
13. Aleatory
ANS A contract in which participating parties exchange unequal amounts.the amount the
insured will pay in premiums is unequal to the amount the insurer will pay in the event of a
loss.
14. Alien Insurer
ANS an insurance company that is incorporated outside the U.S.
15. Apparent Authority
ANS The appearance or the assumption of authority basedon the actions, words, or deeds of
the principal or because of circumstances theprincipal created.
16. Appraisal
ANS an assesment of property to determine either the correct amount ofinsurance to be written
or the amount of loss to be paid
17. Arbitration
ANS A process, agreed to by parties to a dispute in lieu of going to court,by which a neutral
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person or body makes a binding decision
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