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Michigan Personal Lines Exam Questions And Answers With Verified Solutions Already Passed!!!
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Michigan Personal Lines Exam Questions And Answers With Verified Solutions Already Passed!!!
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Michigan Personal Lines ExamQuestions And Answers With Verified
Solutions Already Passed!!!
transfer of risk from person or business to insurer. - ANSWERS✔✔insurance
can end up with a loss or win - ANSWERS✔✔Speculative risk
can only end up with a loss - ANSWERS✔✔pure risk
Risks the insurance company are liable for. - ANSWERS✔✔exposure
the cause of a loss - ANSWERS✔✔peril
the unintended, unforeseen damage to property, injury, or amount paid. -
ANSWERS✔✔Loss
physical loss to property with no intervening cause. - ANSWERS✔✔Direct Loss
Consequential loss as the result from a direct loss. - ANSWERS✔✔Indirect Loss
anything that increases the chance that a loss will occur. - ANSWERS✔✔Hazard
A hazard that can be seen. - ANSWERS✔✔Physical Hazard
,Dishonesty - ANSWERS✔✔moral hazard
Carelessness - ANSWERS✔✔morale hazard
Two or more individuals or businesses agree to pay a portion of any loss. -
ANSWERS✔✔Sharing
insurance company pays the insured if they have a loss. (the insured no longer
bears that risk. - ANSWERS✔✔Transfer
eliminating any particular risk by not engaging in a certain activity. -
ANSWERS✔✔avoidance
the individual or business will pay for the loss if it occurs or a portion of the loss
via a deductible. - ANSWERS✔✔Retention
Lessening the chance that a loss will occur, or lessening the extent of a loss. -
ANSWERS✔✔Reduction
An agreement between the insured and insurer.
- 1st party - insured (customer)
-2nd party - insurer (insurance company) - ANSWERS✔✔Contract (policy)
The larger the group, the more accurately losses can be predicted. -
ANSWERS✔✔Law Of Large Numbers
,the tendency for higher risk individuals to get and keep insurance as compared to
individuals that represent an average level of risk.
-Risks that are greater than average chance of loss.
-Not wanted by insurers.
-Tendency for high risk individuals to get and keep insurance.
-Why insurers go through the underwriting process
-High risk= higher rate to insure or refusal - ANSWERS✔✔Adverse Selection
insurance for insurers. It transfers risk from one insurer to another insurer. -
ANSWERS✔✔Reinsurance
The reinsurer considers each risk before allowing the transfer from the ceding
company. - ANSWERS✔✔facultative reinsurance
The reinsurer accepts all risks of a certain type from the ceding company. -
ANSWERS✔✔treaty reinsurance
business formed as a corporation and owned by its stockholders
-Owned by stockholders
-Dividend is not guaranteed
-Dividend is paid to stockholder
-Dividend is taxable to stockholder
-Issue non-participating policies - ANSWERS✔✔Stock Insurer
does not have stock or stockholders. It is owned by its policyholders (customers)
also known as policy owners.
, -Owned by policyholders
-Dividend is not guaranteed
-Dividend is paid to policyholder
-Dividend is not taxable
-Issue participating policies - ANSWERS✔✔Mutual Insurer
the state where a company is incorporated - ANSWERS✔✔Domestic
company is incorporated in another state or US territory. - ANSWERS✔✔Foreign
company is incorporated in another country - ANSWERS✔✔Alien
-Insurance company
-Admitted
-Certificate of authority
-Sell, place, and service most insurance contracts - ANSWERS✔✔Authorized
-insurance company
-Nonadmitted
-No certificate of authority
-Sell surplus lines insurance products - ANSWERS✔✔Unauthorized
-Insurance sold by unauthorized/nonadmitted insurers
-Can only be sold to certain high risk insureds
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