AINS 21 Segment A (ch 1-3) Study Guide
Solutions
Loss exposure - ANSWER-Any condition or situation that presents a possibility of loss, whether or
not an actual loss occurs
Risk management - ANSWER-The process of making and implementing decisions that will minimize
the adverse effects of accid...
Utmost good faith - ANSWER✔✔-An obligation to act in complete honesty and to disclose all relevant
facts
Contract of adhesion - ANSWER✔✔-Any contract in which one party must either accept the agreement
as written by the other party or reject it
Contract of indemnity - ANSWER✔✔-A contract in which the insurer agrees, in the event of a covered
loss, to pay an amount directly related to the amount of the loss
Self-contained policy - ANSWER✔✔-A single document that contains all the agreements between the
insured and the insurer and that forms a complete insurance policy
Modular policy - ANSWER✔✔-An insurance policy that consists of several different documents, none of
which by itself forms a complete policy
Property insurance - ANSWER✔✔-Any type of insurance that indemnifies an insured who suffers a
financial loss because property has been lost, stolen, damaged, or destroyed
Liability insurance - ANSWER✔✔-Insurance that covers losses resulting from the insured's liability to
others
Homeowners policy - ANSWER✔✔-Policy that covers most of the property and liability loss exposures
that arise out of residential property ownership and occupancy, as well as property and liability loss
exposures that individuals and families may have while they are away from their residences.
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