Property and Casualty Insurance Basics Nebraska Updated 2024/2025 Questions and Answers 100% Correct.
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Module
Property and Casualty Insurance Basics Nebraska
Institution
Property And Casualty Insurance Basics Nebraska
Funciton - operations of an insurance company where the underwriter is responsible for
evaluating applications submitted to the insurer and determining whether a policy should be issued
Earned Premium - the portion of premium paid in advance that now belongs to the insurer
because it apples to t...
Property and Casualty Insurance Basics
Nebraska
Funciton - operations of an insurance company where the underwriter is responsible for
evaluating applications submitted to the insurer and determining whether a policy should be issued
Earned Premium - the portion of premium paid in advance that now belongs to the insurer
because it apples to the elapsed part of the policy
Credibility - the degree of accuracy in forecasting future events based on statistical reporting of
past events
Depreciation - reduction in value, particularly due to wear and tear
exposure units - used a measure of rating units or the premium base of a risk
homogeneity - the degree to which items are similar
Implied warranty - a product is suitable for its intended purpose and that it fits an ordinary
buyer's expectations
inception - the date at which the insurance policy goes into reffect
negligence - the failure to use the care that a reasonable, prudent person would under the same
or similar cirucmstances
obsolescece - depreciation in the value of a property due to becoming outdated
statute - a written law passed by a legislative body
, insurable interset - the insured would incur a financial loss if the insured property is damaged.
May be created by ownership, custody, or control of a property. MUST EXIST AT THE TIME OF THE LOSS
3 elements of insurable risk - 1. Financial (monetary interest)
2. Blood
3. Buisness
Underwriting - process of reviewing applications for insurance and the information on the
application. risk selection process
loss ratio - (incured losses +loss adjusting expense)/ earned premium=
Insurance rates - the amount charged for a particular amount of coverage
class rating - computing a price per unit of insurance that applies to all applicants possessing a
given set of characteristics
Types of individual rate making approaches - 1. Judgment Rating
2. Schedule Rating
3. Experience Rating
4. Retrospective Rating
5. Merit Rating
Judgment rating - is used when credible statistics are lacking or when the exposure units are so
varied that is impossible to construct a class
Schedule rating - rates are developed by applying a schedule of charges and credits to some base
rate to determine the appropriate rate for an individual exposure
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