USAA Licensing Exam || with 100% Correct Answers.

Insurance correct answers Transfer of risk from one person or organization to an insurance company Indemnity correct answers The principle to restore the insured to the pre-loss economic or financial condition. Law of Large numbers correct answers Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest correct answers Proof that someone stands to lose financially if a loss occurs; must exist at the time of the loss in property and casualty insurance Binder correct answers Temporary insurance contract; commits the company to act as if a policy has been issued Peril correct answers Cause of loss Direct Loss correct answers Immediate actual physical damage to tangible property Indirect loss correct answers Inability to use property as a result of a direct loss Risk correct answers Chance of loss; uncertainty of loss What are the two types of risk? correct answers Speculative and Pure Speculative Risk correct answers Involves the simultaneous chance of gain or loss: is not insurable Pure Risk correct answers a risk that presents the chance of loss but no opportunity for gain (insurable) What are two examples of speculative risk? correct answers Gambling Investing What is an example of your risk? correct answers Car accident Physical hazards include correct answers Visible condition that increases the chance of loss Morale Hazard correct answers Attitude of carelessness or indifference to loss Insurer correct answers The insurance company (a.k.a. second party to the contract) Named Insured correct answers A party named on the declarations who is purchasing the insurance policy (a.k.a. first party to the contract)