1. What is insurance?: protection against financial loss
2. what is a premium: a scheduled amount to be paid for an insurance
policy.
3. What are premiums used for: premiums are collected into a "pool" or
"reserve to pay out claimants when needed.
4. how can insurance companies afford to pay for an individuals
catastrophic loss?: the insurer collects premiums from all policy holders
and uses them to pay out the claims of a few.
5. what is Indemnity: payment for damages, that is not more or less
than the amount caused by the damage.
6. principle of idemnity: insurance will pay no more or less than the actual
financial loss suffered
7. indemnification may also include: repairs to
,property reimbursement for additional living
expenses
rental cars and hotels
costs directly associated with a loss
8. 4 Parts of Legal Contract: 1. Agreement
2. Consideration
3. Competent Parties
4. Legal Purpose
9. legal contract - agreement: mutual intent by offeror and offeree
10.six special characteristics of insurance contracts: 1. Personal
2. adhesion
3. utmost good faith
4. aleatory
5. unilateral
6. conditional
,11.what kind of contract is an insurance policy?: Personal contract
12.what is a contract of adhesion: the insured must accept the entire
contract with all of its terms and conditions
13.Utmost Good Faith: An obligation to act in complete honesty and to
disclose all relevant facts.
14.Aleatory Contract: a contract where the values exchanged may not
be equal but depend on an uncertain event
15.Unilateral Contract: insurance agrees that they must pay in event of
a claim. the insured can stop paying premiums at any point.
only the insurer has promised to perform an action.
16.Conditional Contract: A type of an agreement in which both parties
must perform certain duties and follow rules of conduct to make the
contract enforceable.
, 17.Acronym for the four sections of an Insurance policy:
DICE D - declarations page
I - Insuring
Agreement C-
Conditions
E - Exclusions
18.Decelerations section: Always the first section - establishes the
following Names of both parties
Policy number
Location and description of insured
item Dates of the policy
Amount and limit of
coverage Deductible
Premium
19.Definitions section: Defines terms used to write policy including
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